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Friday, April 8, 2011

Low demand for homes in quake-hit suburbs

Low demand for homes in quake-hit suburbs

MICHAEL WRIGHT
Last updated 05:00 09/04/2011
 
Christchurch's eastern hill suburbs face a long wait for confidence in the housing market to return, sellers and real estate agents say.

Mt Pleasant, Redcliffs and Sumner were among the hardest-hit areas on February 22, with hundreds of homes damaged beyond repair.

Property sales have stalled since.

Mike and his wife bought a property outside Christchurch just before the September 4 earthquake and got $1.2 million in bridging finance while they tried to sell their Redcliffs home. They did not want to be identified further in case it harmed their chances of a sale.

Mike said after the damage from the February 22 quake on the Port Hills, finding a buyer was almost impossible.

"Our hands are pretty much tied at the moment to even begin thinking about putting it back on the market."

Because the house survived the quake, it would take longer for the Earthquake Commission (EQC) to inspect the property and OK it, he said.

"They have given it a preliminary look and they're estimating that it's not in the badly damaged category. We are expecting a visit in between nine months and 12 months."

He said they planned to rent the house in the meantime.

"We have to recoup some sort of money, rather than have it sitting there for up to 12 months," he said.

Christopher Smart said his Scarborough Rd property came through the quake "100 per cent", but offers to buy dried up after February 22.

"After that, I didn't really hear too much."

However, several people had expressed interest in the house late last week.

Ray White Redcliffs manager Craig Prier said many sellers were resigned to a long wait for market confidence to return.

"A lot of the properties we were dealing with have been withdrawn from the market until things settle down a bit," he said.

"Redcliffs and Sumner will still be fantastic places to live, but people have to get the confidence to buy in those areas again, and that will come with time."

More people could opt to sell their properties at auction, he said.

"Properties that haven't been affected could go to auction to find out their true value."

He said rental-market demand was offsetting some of the market inertia.

"Many are opting to rent their house out rather than sell it," he said.

Harcourts southern business development manager Jim Davis said he was "pleasantly surprised" by the company's 288 property settlements last month, but most were in undamaged western suburbs.

"Suburbs that had significant damage are still very much in a wait-and-see mode."

He said houses in satellite towns such as Rolleston, West Melton and Rangiora were in demand as quake-displaced Christchurch residents looked to escape the city permanently.

It's just become even more attractive than it used to be. Places in those areas, over the next month, will show a significant lift," he said.

- The Press

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