Quake catalyst for property 'boom': commentator

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The Christchurch earthquake could prove to be the catalyst for a recovery in the property sector, but any upturn will be slow and patchy and homeowners should expect things to get worse before they get better.

Some real estate agents say they are struggling with up to a 30 per cent decline in sales since September 4, as dozens of quake damaged properties are pulled from the market creating uncertainty for buyers and a stagnant property market.

Christchurch real estate agent Tony Brazier of Brazier Property Investments said the investment market had taken a huge hit since the earthquake and since changes were announced to the way the sector was taxed.

Those companies without a rental division would be feeling the pinch, Brazier said.

"As we grew the property management side of the company we used the sales side as a prop. Now the property management is propping up the sales side."

"There are a lot of real estate agent agencies that are saying thank goodness we got into that even though it is a thankless sort of a task."

"It (property management) comes into its own in this sort of a market."

Property commentator Olly Newland said a recovery of the property sector could be several months away, and things would get worse before they got better.

"I think it will be months before anyone starts building and I think it will take another six months before there will be a small mini boom for the Christchurch area."

"My feeling is that while these tremors are still continuing there will be a little bit of a recession."

Sue Goulding of Ray White Real Estate in Avonside said a number of her clients had pulled their properties from the market as they sought repair work for quake damaged homes.

Many property deals were also taking longer to settle causing cashflow problems for some real estate offices, she said.

However Goulding expects the downturn will be brief.

"There is going to be a silver lining because there's not enough houses to cater for homeless people," she said adding that open homes conducted by her office were already generating a lot more interest than before the earthquake.

Harcourts southern business development manager Jim Davis said about 15 per cent of properties listed with Harcourts offices in Christchurch had been pulled from the market since the earthquake.

Davis, who is based in Christchurch, said he expects to see more activity in the market and a firming up of prices as soon as the school holidays finish.

"We won't see a big degree of turnover, but there will be competition for a good house that is undamaged."

"I would say if you were a person who was sitting in rental accommodation before the quake waiting for property prices to get to their lowest possible point, you're probably now thinking you should buy before prices rise."

Meanwhile real estate firms said demand for rental properties had sharply increased since the earthquake, raising the possibility of an upturn in the investment property market amid higher rental returns.