Inner City Living Boom Expected
Tuesday February 9, 2004
INNER CITY LIVING BOOM EXPECTED.
Christchurch's apartment market is set for a boost as more residents are enticed to the inner city for financial and lifestyle reasons.
Peter Cook and Dave Sutton, directors of Canterbury property company, Simes Ltd expect a significant increase in the number of apartments built in central Christchurch in the next three years. Development has already been significant, but at least four large projects are likely to get the green light in the short to medium term in response to soaring demand.
Mr Cook says the move back to the inner city is a logical one given the pressure on the city's 'green belt' for housing development. The volume of section sales in Christchurch increased 38.3% within the last calendar year, with prices rising in the last five months of 2003 by a hefty 34.2%, according to Real Estate Institute of New Zealand figures.
"The rise has not deterred buyers to date,'' Mr Cook says.
"But with no signs of a slow up in the consumption of this land, prices are likely to continue to rise. The trend in the suburbs is expected to result in inner city apartments, especially those in the $350,000 to $400,000 price range, becoming a realistic and attractive option for many."
Mr Cook says the appeal of inner city apartments mirrors a change in the face of New Zealand society. "People are choosing to marry later in life, and many couples decide against having children or to only have a small family. Job security has improved, but many are working harder and longer. Their spare time is more precious than ever."
Simes Ltd believes the move to apartment development is logical and follows trends in both Auckland and Wellington.The difficulty of commuting and shortage of inner city parking space in both cities have been factors influencing apartment buying decisions.
To date commuting has been relatively easy in Christchurch compared with North Island metropolis. The situation is changing, however, and peak-hour jams are a factor on many suburban access roads, Mr Cook says.
Developers will respond to any swing in market demand. Building apartments is a preferable option on some of the available commercial land in the inner city, especially given the high cost of building office space.
Development is expected to cover all market sectors, but there needs to be some careful monitoring of the apartment block's occupancy mix, particularly with the higher priced developments.
"Apartments at the top end of the market, in the $1.25m to $2.5m range, are picked to be a good investment. These types of properties have found a ready market in Queenstown, and as Christchurch offers a city base, the city's apartment trend is expected to receive much support."