Fletcher Living homes in central Christchurch struggle to find buyers

From Checkpoint, 5:44 pm on 10 June 2019

After close to six months on the market, the first of the townhouses built by Fletcher Living in central Christchurch are struggling to sell.

Priced at between $1 million and $1.6m, RNZ understands as few as three of the 20 homes in the development have sold.

They were the first batch of 940 flats and townhouses promised by Fletcher Living to help achieve the ambitious goal of having 20,000 people living in central Christchurch by 2024.

RNZ was keen to take a look inside the mostly unsold Latimer Terraces apartments on the eastern edge of Christchurch's CBD, but was told by Fletcher Living's Steve Evans that they were not available to view.  

He would not be drawn on the exact number that have sold.

"I won't go into the commercial details of what we've sold. If you'd like to come and buy one, is the best way of saying it. We're finding there is a good appetite for some of that product, but interesting enough from a product point of view, from a home type point of view, that suits a part of the market."

One home Mr Evans was keen to show RNZ around was a three-bedroom townhouse at another Fletcher Living development down the road, known as the Bedford Terraces.

This one had an offer made on it a month after it went on the market, with a price tag of $779,000.

Initial sales of the handful of already completed Fletcher Living homes may have been slow but that had not put the company off forging ahead with building further terrace houses and apartments.

Under an agreement with the government, which was selling it lots of land at commercial rates, the company had 44 apartments and 50 terrace homes under construction in the development RNZ was shown and another 58 being built as part of another project just a block away.

Most developers needed to secure a certain number of pre-sales before a bank would be willing to lend them money, but not Fletcher Living, Mr Evans said.

"And we're almost unique in that position because we don't need to worry about getting pre-sales to start development. We're backed by Fletcher Building, we're owned by Fletcher Building and therefore have the balance sheet to be able to deliver."

Most homes were aimed at the lower to middle part of the market.

Apartments ranged in price from $375,000 for a one-bedroom flat to $650,000 for a larger one with two bedrooms.

Mr Evans said it was a case of build it and they would come.

"We've always thought that it's going to take time, it takes time for people to understand what city living is about. I mean we've invested over a million dollars to bring in temporary uses into One Central, to bring people back into the city. We feel that's our obligation as good corporate citizens, as good community builders, to look at how do we get people here."

He was optimistic about there being 20,000 people living in the city's CBD by 2024.

"I wouldn't say it's ambitious: it's visionary - and you don't get to affect change, you don't get to create communities unless you think wider than just the physical nature of a house. So we've spent a lot of time looking at how we do that. We've got a great partner in Ōtākaro. 

"We've got great dealings with Christchurch City Council, and all of those partners are all focused on a singular goal, which is bringing life back into the city. We'll do our part in the residential side. 

"Hopefully we'll get some more stadiums, hopefully get more development going on in terms of Christchurch, and when we all come back here in six years' time we'll be saying 'gee, was it only 20,000 we were trying to get, because it could be more'."

Mr Evans' positive outlook was not shared by the Property Council which commissioned research last year that found the 2024 target was "unrealistic", noting that even central Wellington had fewer than 20,000 people living there.

A real estate agent of long standing in Christchurch, Tony Brazier, said he was not surprised that apartments at the $1m to $1.5m price range were taking a while to shift in this part of the city. 

"There is plenty of townhouses and apartments on the western side of the inner city at that sort of level, but the eastern side has never been proven at that level. People will see that kind of value eventually but right from the start it might be a bit difficult."

Mr Brazier said while the pace at which new CBD restaurants and bars were being built had picked up there still needed to be more to make it a really attractive place to live.

"You've got to ask yourself 'why would they be there, they don't all want to be there just for work'. If they are then they want to be able to walk to entertainment, all sorts of things in the inner city that they might have been used to if they lived in London or somewhere like that."

All three of the housing projects that made up phase one of Fletcher Living's East Frame development were now either completed or under construction.

It was hoped construction on phase two would start by the start of next year.

All eyes will now be on the development to see if it can deliver on its promise of bringing people back into the heart of Christchurch.