The latest figures released this month by the Real Estate Institute of New Zealand (REINZ) confirmed that, in March, the property market was “extremely buoyant” across the country, with median house prices up 13.7 per cent year-on-year to $665,000 (a new all-time record).
In acknowledging the likely adverse impact of Covid-19 on the housing market, REINZ chief executive Bindi Norwell pointed out that, as tough as the situation is, “some good may come of it”.
For more on this, here’s our new property market update.
In March 2020, for the fourth month in a row, every region in New Zealand saw an annual increase in median prices, with eight regions recording all-time-high median prices. These include:
REINZ data echoes CoreLogic’s recently-released figures: in the lead-up to Level 4 restrictions, the property market was showing continued strengthening across the country, thanks to improving buyer confidence and low mortgage rates.
However positive last month’s performance showed to be, there’s no denying that April statistics will paint a much different picture, as both CoreLogic and REINZ openly acknowledged.
“How big the effects of COVID-19 are is up for debate, but the impact will depend on a huge number of factors including how long the country is in an Alert Level 4 lockdown for, the level of unemployment, consumer and business confidence levels, people’s ability to access finance (and finance their own mortgages) and how long the wider economy takes to recover,” said REINZ chief executive, Bindi Norwell. “Property is a long-term investment and the market will recover; however, the question is, how long it takes to recover.”
Although during the lockdown period property sales and online auctions were still allowed, and some agents were able to conduct virtual viewings, in-person inspections have not been possible, and most settlements and conditional sales have been deferred. Having said that, Norwell stressed that there’s still interest in the market.
“Going forward, we expect people will take a bit of a ‘wait and see’ approach when it comes to listing their property for sale. But for those who have decided after four weeks of being locked in the ‘bubble’ that they don’t like their house anymore, they will be desperate for the chance to move, so there may be some great opportunities for those wanting to buy and sell in the coming months,” said Norwell.
“Buyers and sellers might have put things on hold but that doesn’t mean they stop looking out and researching what they want. That activity continues… People love houses and what they want to do has not stopped.”
According to OneRoof.co.nz editor Owen Vaughan, April’s housing market figures will likely show big drops in activity, but they won’t be representative of the impact of Covid-19.
“The numbers that will matter most will be those that measure the market once the country comes out of lockdown,” said Vaughan. “These will show the true effect of Covid-19 on buyer and seller sentiment, and until then, Kiwis should avoid making hasty property decisions.”
Once again, we’ll continue to watch this fast-evolving situation closely. If your property plans or financial circumstances have been affected by Covid-19, please don’t hesitate to contact us: we can help your review your mortgage and look at the options that may be available to you in these uncertain times. Remember, we’re here for your questions.
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