The impact of lockdown on the housing market.
Speculations are rife as to what impact the current lockdown will have on the property market. If history is anything to go by, we would see activity plummet during a level 4 lockdown as it did in 2020 and then increase rapidly in the months following. Last year we saw the lowest volumes on record during lockdown, followed later in year by some of the highest volumes as depicted on the North Shore sales volumes graph below.
But will that replicate in 2021? We have entered both level 4 lockdowns with rising prices and sales volumes close to average on a long-term basis. Entering the current lockdown, we have seen increased confidence from buyers – activity to date has remained high with high numbers of determined bidders active at our online auctions. At the time of writing Harcourts Cooper & Co had sold 100% of their online auctions during the current lockdown (25/25). Stock available is at extreme low levels with less than 900 listings currently available on the North Shore.
A notable difference between the 2020 and 2021 lockdowns in the interest rate & lending environments.In March 2020, the Reserve bank cut interest rates by 0.75 percentage points and removed the LVR restrictions.Yet in 2021 they have advised that rates are set to rise and LVR restrictions tighter than before for investors.
As we head towards the usual busy Spring selling season it is likely that the current lockdown will in fact propel the market – with built demand during the current restricted conditions and the fuel of low interest rates, low stock numbers, low unemployment and confidence in the markets response following a lockdown.