A new report from One Roof has revealed that the local property market may recover faster than anticipated, just as the real estate industry prepares for a return to normalcy under Level 2.
Here’s what you need to know:
Auckland Property Market Recovery from Covid-19 Could Be Sooner Than Expected
According to figures from OneRoof’s latest Property Report, Auckland’s recovery from the Covid-19 crisis could happen sooner than many expect.
The report, which featured research from OneRoof and its data partner, Valocity, suggests the future isn’t as bleak as Kiwis fear. OneRoof and Valocity analysed the movement of New Zealand house prices after 2007 GFC, found that while the number of house sales dropped quickly and steeply, house prices fell only marginally.
OneRoof editor Owen Vaughan noted that the main difference between the GFC and the current global situation was that the GFC was a banking crisis and noted that the recovery of the current situation will most likely be quick as the government is responding quickly to prevent any major economic crisis.
“Many of the underlying fundamentals that support the housing market remain in place: banks funding lines, historically low interest rates and housing shortages within key locations, although unemployment will be the key stress factor in the months ahead.”
Vaughn also noted that the market was in a healthy state before the lockdown, and noted that there may not be much change, with banks keeping interest rates low, and house prices expect to stay as they were. Figures from Report show house prices in Auckland were on an upward trajectory before a nationwide lockdown put values on hold, with median property values in Auckland City and the North Shore up a healthy 5% in the three months before March 26.
Buying Property Under Level Two Will Be A Welcomed Return to ‘Normal’
Under Level 2, open homes and rental viewings involving fewer than 100 people can take place, provided those involved keep a physical distance of one metre at all times, and hygiene etiquette is adhered to. Sale and purchase agreements can be negotiated in person and auctions involving fewer than 100 people can happen, with regular cleaning of high touch areas and contact-tracing system for everyone.
Real Estate Institute chief executive Bindi Norwell hopes that Level 2 will bring a feeling of normalcy that will hopefully bring the market back to life, “Getting the real estate profession up and running in a manner that is more ‘normal’ than we’ve seen in the past six weeks is a huge step and one that will be warmly welcomed by buyers, sellers and real estate agents across the country.”
According to Realestate.co.nz, the property market was already slowing some signs with property sellers returning to the market in the first week of Level 3.
It has released data showing that, before New Zealand went into Level 4, there were an average of 717 new listings on the site every day, across all listing types, but that dropped to 188 during the lockdown. However, in the first week of being back at Level 3, daily listing numbers lifted to 508.
Realestate.co.nz said some people were using their time in lockdown to browse properties. The average number of pages users were looking at in a session was up 28 per cent – with almost a quarter of all traffic in the first week of May coming from offshore.
Realestate.co.nz spokeswoman Vanessa Taylor said the market had been affected by the pandemic but the growth in listings was encouraging, “There is a lot of speculation around the property market right now, but I’m not convinced that it’s all doom and gloom. We have seen sharp drops followed by gradual recoveries in several overseas markets and there is no reason to believe that New Zealand will be any different.”
by Ravi Mehta, from Professional Financial Solutions