Record migration and Christchurch property prices rise

Migration figures for January show a record annual inflow of 71,000 people for 2016.
At an average three people per home, that’s enough demand for almost 24,000 homes.

According to economists at Westpac, the net outflow of 1700 people in the year to January was the lowest since 1984, well down on levels of nearly 40,000 in 2012.

They say  with Australia’s labour market remaining sluggish, crossing the Ditch for work isn’t as appealing as it  was and continued arrivals of non-NZ citizens, especially from Europe, China and other parts of Asia is putting pressure on the infrastructure.

“Migration will likely be a hot topic ahead of September’s general election,” they say.

Christchurch prices up

The average house price in Christchurch sat at $563,322 in February — an 11 per cent increase on the same time last year.

Provisional data from realtor Harcourts shows low stock levels continue to be the main driver in the Christchurch market.

The firm’s Chris Kennedy says the agency has 1546  properties listed for sale in the garden city,  down 21 per cent on the same time last year.

However, Kennedy says listings are starting to increase, and speculation about a property market “bubble” bursting is unfounded.

I don’t know of anyone talking about a property bubble given the migration levels.
Kennedy says there has been a fall in the number of property investors following tougher loan-to-value restrictions introduced last November.

“This has seen the market cool slightly and return to the healthy levels of 2014,” he says.
“The heat of 2015/2016 was unsustainable long-term,” he says.

AirBnB decision

The Tenancy Tribunal has ruled that tenants sub-letting a rental property to Airbnb guests is a breach of the Residential Tenancies Act.

The tribunal found in favour of Wellington-based property manager Keith Powell after his tenants breached both the Residential Tenancies Act and the Tenancy Agreement for sub-leasing a property via Airbnb, earning $1568 from “hosting” guests.

The tribunal awarded $1000 to the property owners for “mental distress”, and exemplary damages of $300 as a deterrent from doing it in the future.

Powell, director of Nice Place Property Management, says the deterrent doesn’t go far enough.

David Faulkner from Property management firm RealiQ says insurance companies may not cover damage to property  caused by AirBnB guests as it is not being used as a principal place of residence by the tenants.