Monthly Market Update | March 2020
Pre Lockdown High
As New Zealand prepared to enter lockdown on the 25th March, a flurry of real estate activity occurred concluding deals. This was a continuum from the high energy, high volume market experienced for the preceding 5 months.
Pre-lockdown the market was on a high; there were 412 sales on the North Shore up 30% from the year before. Prices remained strong; the North Shore median of $1,130,000 in March was up 11% on the year before.
We now await the announcement of when we move from level 4 to level 3, which will ease some restrictions. For real estate it will mean people can move homes, one on one viewings & pre-settlement inspections may be possible subject to public health measures. The industry is awaiting specific government guidelines to confirm this.
The question now is how big will the effects of COVID-19 be on the property market? Ultimately this will be dependant on an array of unknown factors including time in lockdown restrictions, unemployment, market confidence, and the wider economy.
As restrictions ease, the property market will re-engage and likely an initial flurry of activity will occur as a backlog of activity is processed. During lockdown, ‘life events’ requiring real estate transactions have continued; growing families, estate sales, divorces, changing financial situations and with more time spent in our homes some will have decided to make a change.
Looking further, it is forecast interest rates will remain low, New Zealand’s favourable response to Covid-19 has installed confidence that it is a good place to invest and many of the 1 million kiwi’s living abroad may choose to return with their families. We can be further reassured looking at the effect the 1987, 1997 & 2007 economic crises had on the property market… in no case did we see property process decline more than 5% and any price declines had recovered within 18 months.
Property has always been a desirable medium to long term investment and there is no doubt New Zealand remains a highly desirable country to live in.