Christchurch's real estate market is nearing the end of another "slow but steady" year, leaving some in the industry to ponder an uncomfortable question: does the city have too many houses?

The latest statistics suggest supply is more than meeting demand. The average rateable value (RV) of Christchurch properties has barely moved over the last 24 months. The median house price in the city is rising, but negligibly so.

"Whether you're talking to bankers or economists or real estate agents, they're all just saying that we're in a slow steady period of no growth and that's what we're seeing out there," Quotable Value valuer Hamish Collins said.

"Supply's just equalled demand."

Christchurch is no outlier here – some regions are more sluggish, and the recent cooling in Auckland is well-documented – but it grappled with a unique supply issue in the wake of the earthquakes that destroyed thousands of homes. That shortage duly gave rise to a building boom, which Christchurch City Council consenting figures show peaked between 2014 and 2016. Since then both new unit and dwelling numbers and the council's 'net new housing' measure have been tracking down.

READ MORE:

* Auckland house prices slip and not set to gain traction soon – Trade Me

* Christchurch's terraced homes struggling to sell as housing market levels

* Council to fast-track new service to boost inner-city population

* Costs, lack of apartment culture holding back Christchurch's inner city push

The question is whether the boom filled, or over-filled, the void. The building industry has been wary of the latter for a while. In early 2017, Stuff reported on multi-unit properties sitting finished and unsold in suburban subdivisions. "[We] certainly won't be building any more of those," construction boss Mike Greer said at the time.

Speculative developments were the first to go. Management consultant Mike Blackburn monitors building activity in the city for his small and medium-sized builder clients. The raw council consenting data he collected showed a drop-off not just in number but in type. As an example, in September 2015, nearly 300 consent applications were approved. Fifty-five were for Mike Greer Homes, one of the biggest group home builders in the city, and most of them 'spec' homes for developers. In August this year, total consents were back to about 120 and Mike Greer accounted for four of them.

"The golden goose is over," Blackburn said, "I wouldn't be advising anyone to be building large-scale spec houses at the moment because we just don't have the population for growth."

Recently, Blackburn attempted a more precise measure. Accounting for population growth since the earthquakes and average household occupancy and discounting builds that replaced red-zoned properties, he estimated Christchurch had built about 1900 more houses than it needed. This number doesn't equate to a straight surplus – some vacant stock is needed for a real estate market to function – but it underscores the extent to which the city has more than erased its housing deficit.

"It's hard to imagine that there's 2000 empty houses out there," Blackburn said, "But then again, is there?"

If Blackburn's equation does amount to a surplus, it hasn't proven terminal for the market. Christchurch's median house price last month was $452,500, according to the Real Estate Institute of New Zealand. It's up from $444,000 a year ago, although still down a little on two years ago. Monthly sales are steady at just over 500 and the RV numbers, while stagnant, aren't falling.

"We're having a typical, average Christchurch market," Harcourts South Island business development manager Jim Davis said.

"There's no pressure on prices to drop, but no pressure on prices to lift either."

STACY SQUIRES/STUFF Christchurch property manager Tony Brazier.

Property manager Tony Brazier said the market was "at the bottom of the trough", having spent the last year or more adjusting to oversupply. The surplus, he stressed, was only ever in part of the market: mass-produced new builds in outlying subdivisions.

"But that filters down through to the whole market," he said.

"Once there's no more oversupply we start to build up a pressure. That pressure is what puts pressure on prices and rental levels. Over the next year or so we'll start to see, I think, some pressure coming back into the market."

A contained surplus would help Christchurch, which is still some way to go in its central city residential development plans. As part of its earthquake recovery, the city has a lofty goal of 20,000 CBD residents by 2024. A recent report commissioned by the New Zealand Property Council called that "unrealistic".

"It's a totally different kind of market than the one that's been over-supplied already," Brazier said.

"They're a different person. They're not families. They're either double-income-no-kids or upwardly mobile singles. Maybe empty-nesters. We haven't really seen that yet. I think the danger of the east frame is less about oversupply and more about the price they seem to be wanting."

Blair Chappell​, one half of the Williams Corporation, agreed. With few players, outside of the Crown-contracted Fletcher Living, in the central city market right now, demand was no issue. Williams was pre-selling 15 to 18 apartments a month, Chappell said. A year ago it was eight to 10 a month.

"It's not necessarily that demand's increased, we've just increased supply, increased marketing and we've probably found more of the already existing [market].

"We do need more people bringing in supply of various house types. We cater to the one or two-bedroom entry level price point. If you look at the consent numbers, there's not that many people doing good numbers inside the central city."

JOHN KIRK-ANDERSON/STUFF Builder Dayle Jones downsized after the construction bonanza. He may have to cut more workers as business dries up.

SURPLUS TO REQUIREMENTS

The busiest it got, Dayle Jones had 42 staff on the go. This was back in the dark days around 2013, when thousands of earthquake-damaged houses around Christchurch needed repairing. Jones, a builder from Governors Bay, had reluctantly gone in with the Fletcher-led home repair programme. It wasn't the work he wanted to do, but it was the only work around.

When that died down, he went back to his usual fare: alterations, decks and a few new builds. Business was good. Before the earthquakes he employed three builders, including himself, and a labourer. Now he had a team of between 12 and 16. Downsizing from 42 to that many was easy, "almost pleasurable".

"Because I specialise in architectural houses on the hills, I guess that was my peak time. I don't really do shoeboxes on the flat. There's no money in it. You're just competing against guys who are going under. Or you could work for a group housing company."

Then, in the middle of last year, things started to change.

"There's no work," Jones said, "It's crazy. We're doing bits and pieces. I'm struggling to keep the guys going and probably am going to have to let a couple go.

"Getting rid of the good, genuine hard-working guys, that's just heartbreaking. These guys have got kids and mortgages. They're really decent blokes who show up and put a good day's work in."

* Comments on this story are now closed.