While we’re busy defrosting our windscreens, mortgage rates are also starting to thaw. Let’s look at what’s been happening in Ōtautahi Christchurch and the wider South Island property market.
Interest rates are cooling off
The Official Cash Rate has dropped to 3.25%, and the best one-year mortgage rate is sitting at around 4.89%. One of the major banks has even dropped its three-year rate to 4.99%. That’s the lowest we’ve seen in a long while. It’s a big deal for anyone wanting to lock in a bit of long-term certainty.
What's happening in Christchurch? (With stats courtesy of OneRoof)
The property market in Christchurch continues to go about its business, quietly climbing while other regions are still catching their breath.
The city’s average property value has risen 1.4% over the last three months, now sitting just $4,000 shy of the post-Covid peak of $802,000 (set in June 2022). That means Christchurch could hit its peak again as soon as next month—a much faster recovery than in Auckland or Wellington, where prices are unlikely to hit that benchmark until 2028 or even 2031.
Listings remain at historic highs in Christchurch, offering plenty of choice. First home buyers are leading the pack, making up around 35-40% of recent activity in the South Island office. Well-priced homes under $700,000 in suburbs like Redwood, Belfast, Bishopdale, Hornby, and Broomfield are getting snapped up quickly, thanks to improving affordability and steady employment confidence.
For the first time in over a decade, rental stock is up 20% on this time last year. That’s flattened rent prices and, in some cases, landlords are offering discounts to fill properties. If you’re a property investor, it’s something to keep a close eye on.
We’re also seeing competition heat up in the $800k to $1.3m bracket, where growing families are upsizing—often driven by schooling or other lifestyle needs. The key here is sharp pricing: buyers are motivated but not desperate.
Across the South Island
- Canterbury’s average property value is $797,000, just $1,000 shy of its peak.
- Queenstown-Lakes has surged to new highs, with the average property value topping $2.1m.
- Otago and Southland are also hitting record levels, with suburbs like Arrowtown and Lake Hayes leading in dollar gains.
These markets are performing strongly compared to many parts of the North Island. Much of this strength comes down to relative affordability (in Christchurch at least), strong demand across Queenstown and Otago especially for high-end and second homes, and confidence creeping back in with rates trending down.
Construction picking up again
Construction activity is slowly picking up again, especially in Selwyn, Queenstown, Wanaka, and Cromwell. Developers are still cautious, but sections are selling and more builds are being locked in. We expect land supply to tighten over the next six months if demand holds steady.
Now’s a good time to review the books
With rates shifting, this winter lull could be a smart time to check in on your finances, especially if you’ve got high-interest debt kicking around. For some, folding credit cards, car loans or personal loans into your mortgage can help free up monthly cashflow. For others, paying it down separately is smarter. Either way, it’s worth doing the maths.
Final thoughts
The market’s not booming, but it’s definitely not busting either. Things are ticking along, and interest rates are moving in the right direction. The steady hand of first home buyers, improving sentiment and realistic vendors are keeping the wheels turning.
If you’re thinking about buying, building, refinancing or just want a second opinion on your mortgage setup, we’re always here to chat.