Real-estate sales rise, but building blues continue

Press, 2 December 1978, Page 4

Real-estate sales rise, but building blues continue

By JENNIFER HAMILTON , Real-estate sales in Christchcurch have picked up to eoual those of the 1970-71 pre-boom years, but the building industry has remained depressed The upward swing in the number of houses sold early this year has continued, and there has been a fairly s’rong demand for houses in the last two months Confdence is returning to the market, according to the p-esident of the Real Estate Institute (Canterbury branch). Mr G Kissell. He said that there was a very strong demand for bouses in the $35 000-$55,000 price bracket; not enough of these houses w’ere availablr to satisfy prospective buvers Perhaps because of th' shortage. more expensiv sections in established <>■ ‘exclusive" areas have be come easier to sell to buver? unable to find a suitahh existing nronerty. They elect to build instead. However, the market for sections has been fairly ouiet most of the year, and is still sluggish. Numerous houses priced from $BO,OOO to $lOO,OOO an selling, and small holdinq. within easy travelling distance of the city are in demand. On the other hand, own- ’ ership flats are generally difficult tn sell., although me dium-priced flats are still popular with retired person moving from large fam’lv homes into smaller, easily maintained accommodation. Houses in the low price range ($16,000 to $23.000'i are often very hard to sell and while houses in the higher price bracket ofter go for well above the 197-' Government valuation lower-priced nouses sell at pr below the estimate Some ownership flats ant’ cheaper houses have beer withdrawn from the markc because their owners have p’ven up trying to sell ant have chosen to let instead Young couples btiv new flat with a Housing Corporation loan, outgrow the flat, ther cannot find a buver becaust rhe flat has become an exist ing property. Because of th* regulations, voune couple* with fewer than three child r»n can"irf get finance from this source. The jeady availability of bank finance mav cause couples to seek more ex-.

pensive houses The assistant manager of the Canterbury Savings Bank (Mr R. T. Bray) said that the bank was lending slightly more than S4M a month, but still could not meet the demand or finance. Mr Kissell said that plenty of money was available. 1 but it was expensive to ser- ■ vice loans. More property would move if interest rates were reduced, he said. While speculative building has almost ceased, some houses are still on the market after more than a year. The difficulty in selling sections zoned industrial indicates the lack of confidence (and finance) in the industrial sector. When 13 sections from the first stage of the multi-million dollar Marvlands development were iffered at auction a month igo. onlv two sold. Inquiries connected with documents handled by the '.and Transfer office were -onsistentlv tin for last month, said the executive -fficer (Miss P. M. Daly) 'jail transfers numbered ’B3l in November, comparer .vith 1700 in November 1977 Monthly figures since Mac have been above 1500. f narked increase over tht nre'ious five months; onlv 1025 were registered ir lanuary. and 1293 and 129* n March and April. The improvement is con firmed by real-estate agents who generally agree that th< ■ number of inquiries handlei ■i is encouraging.

However, building permit I - figures for this year show a 1 '.marked decrease compared k with last year, and reflect e the state of the house-build--11 ing industry. d A total ot 370 permits were i issued for dwelling units, in- - eluding pensioner cottages. : !. to the end of November. 223 ■■ fewer than at the corresv ponding time last year. Re’s; cent figures indicate that a graph of the number of g building permits issued since e 1973-74 will continue to •- drop sharply in the 1978-79 year. i 8. However, there are signs d that commercial building is '■ picking up slowly. Four e large contracts for public 3 'buildings, including the Nat- ’ e ional Mutual Life Assurance - r building, were let in the e Christchurch area recently h The field was still very . competitive and cut-throat n tendering continued, said [ e me builder. Some were ' prepared to break even or j even lose money to keep i employees and . equipment working. P According to Mr Wayne 7 Wilson. director of the v Canterbury branch of the p Master Builders' Association, lf 'the reduced demand for x houses prevents builders r from expanding. Renovation >4 work is helping the industry'. The house-building ini' dustry appeared to have hit s bottom and stabilised there, le he said. If it did grow it id would do so more slowly jthan in the past. Builders.

could no longer rely on immigrants to provide a steady' demand for houses. Mr Wilson is also concerned about the loss of; skilled tradesmen overseas,! and the drop in apprentices entering the building industry. Lay-offs of carpenters! and other tradesmen had| levelled off, as building! firms now ran on skeleton! staffs. "We’re learning to live! with what we’ve got by cut-! ting profit margins,” he said. Mr Wilson does not envis-; age any sharp improvement! in the house-building industry. People were tending to stay put, he said. However. Mr Wilson does not regard the builders’ plight as desperate. Only 10; of the 320 registered build-, ers belonging to the Canter-j bury branch of the Master' Builders’ Association had given up because of the industry's state, he said. Most! had carried On at a reduced level. Diversification had been jnecessary for many. A builder could specialise in new homes three years ago, but now often had to do any work available. Ihe use of sub-contractors had declined. The managing director of Mauger Homes (Mr R. G. Mauger) insists that the demand continues for new houses. Lack of job security and the high cost of servicing loans were hindering young couples seeking their: own homes. Conditions were particularly hard on house builders. “If we weren’t building ownership flats we’d almost be out of business,” Mr Mauger said. “If the building industry' was going reasonably, unemployment figures could drop by a third within three months." he said. He criticised the erratic stop-go bursts characteristic of the industry recently. Mr Mauger said that it would have been easier for! his firm to close, but. 30 men would have been thrown out of work. In spite of increased business costs he had not been able to increase house prices, for the last two years, he said. The next few months would decide whether the business he had built up over 30. years. went under. "Things will have to get betrer. They can't get worse," ; Mr Mauger said. i ♦