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Christchurch housing market getting back to normal four years after earthquake

Building and Housing Minister Nick Smith said that planning, median house price and average weekly rent data shows that supply and demand are getting back into balance since 10,500 homes were affected.

Building consent data shows 1,134 new home building consents were issued in the year to February 2012, 1,509 to 2013, 2,818 to 2014, and 4,433 to 2015, totalling 9,894 homes.

Median house prices increased from $320,000 in March 2012 to $359,000 in March 2013, a rise of 12% and to $401,000 in March 2014, another 12% rise, and to $415,000 in March this year, an increase of 3%.

Average weekly rents in Christchurch increased from $344 in March 2012 to $378 in March 2013, a 10% rise, to $418 in March 2014, an 11% increase, to $418 in March this year, no increase.

The Christchurch Housing Accord was developed in 2014 between the new council and the Government to complement the broad programme of work on Christchurch’s housing recovery, and to ensure stronger coordination between council and Government.

The Government has initiated 10 different interventions and committed hundreds of millions of dollars to Christchurch’s post-earthquake housing recovery. These have included the provision of four temporary accommodation villages, additional support for emergency housing and Christchurch Housing Fund for joint housing developments between council and Government.

Smith said that he is satisfied with the progress we have made in increasing the supply of new housing, but less satisfied that sufficient homes are being built in the more affordable range. ‘I am concerned at how difficult it is for first home buyers to get into the more expensive, post-earthquake housing market,’ he added.

Smith hopes that the new KiwiSaver HomeStart package, which came into effect 01 April, will help the housing development sector to build more affordable homes. It includes grants of up to $20,000 for 12,000 first home buyers in Canterbury over the next five years for homes under $450,000.

‘The HomeStart scheme has been specifically tailored to the Christchurch recovery by allowing second chance first home buyers to be eligible, so that it will assist people who may not have been insured, or through other difficult circumstances, find themselves in a similar situation to a young person buying a first home,’ he explained.

‘The Christchurch housing market will be transitioning over the next two years to more normal market conditions. We will be reviewing the earthquake specific assistance packages as the market returns to normal, as well as ensuring that the momentum of the recovery continues,’ he added.