Tuesday 22nd March 2011
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Real estate agency Bayleys Canterbury is predicting a broader but lower central business district will arise in Christchurch after last month's earthquake, while demand is expected to escalate for residential properties in more stable areas of the city.
Pete Whalan from Bayleys Canterbury said the CBD would expand outside of previous limits, while professional firms would relocate to the suburbs.
The exodus from the CBD of smaller professional businesses, such as law firms, accountancy practices and administrative services, was being done on a temporary basis and of necessity for now.
But the move would become more permanent as time went on and firms become comfortable operating in the suburbs, Whalan said.
In the CBD, more people would have psychological issues working in buildings higher than three or four stories.
"We will see the bigger multi-national corporations, government agencies, and regional headquarters of New Zealand companies still requiring the same CBD floor size as prior to the quake, but that floor space will be much closer to ground level - hence having broader buildings."
Feedback from scores of Bayleys' long term clients indicated the city's CBD would regain its vibrancy, but could take up a decade to fully recuperate, Whalan said.
Retail recovery in the CBD was a "sure bet".
The mall-size retail operations in Christchurch had limited vacant land to expand into, and while some boutique-style shopping hubs may evolve on the city fringes they would return to the CBD in time, he believed.
Land zoned for commercial and industrial uses was available on the city's fringes, including an abundance of land around the airport where infrastructure services were in place and the land was ready to be built on.
Residential property prices were expected to fall in some areas and rise in others as the market readjusted.
Bayleys Canterbury senior sales manager Karen Phillips said demand would rise for residential property in the region's northern and western suburbs and boundary areas, including existing commuter towns of Woodend, Rangiora, Prebbleton and Lincoln.
That would require extensive infrastructure investments, possibly a light rail network or the widening of major trunk road routes.
Improvements to road and rail networks would increase the attraction of outlying areas such as lifestyle property development Pegasus, Phillips said.
Residential areas to the south, west and north of the city were likely to gain buyer attention with the land base more stable on gravel-based soils.
"This could see prices move upward quickly as available land is grabbed by residents wishing to remain in the city but move from their existing locations."
Suggestions from Prime Minister John Key that the Government might buy out homeowners who did not want to return to liquefied neighbourhoods beyond repair could open up opportunities for property developers and investors returning to the market, Phillips said.
People relocating out of the city's southern and eastern suburbs could expect to find the buyer pool for their property to be possibly more limited, but it represented an opportunity for investors to buy and replenish the residential rental property market.
The big unknown was what land would be deemed recoverable, and what land would be written off.
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