It is now 6 weeks since we said farewell to lockdown, and despite a small number of new cases and borders remaining closed, New Zealand looks to be leading the world in terms of recovery from COVID-19. But, closer to home, how is the property market fairing? In early May we predicted that the impact of the pandemic on the real estate industry would follow more of a ‘V’ shaped trend – a sharp impact followed quickly by a sharp recovery - as opposed to a slower ‘U’ shaped response. And so far this prediction has held true.
Government involvement through two rounds of wage subsidies, and the business loan scheme has contributed to the current positive outcome. As has, without doubt, the Reserve Bank removing the loan to value ratio restrictions (LVR), and notably, record low interest rates. Moreover, in an earlier blog post during lockdown, we forecast that there would be an influx of buyers in 4-6 weeks post-lockdown. And that is now exactly what we are seeing.
During a recent campaign, we had 47 groups of buyers view a property. And just this past weekend, we had 17 groups through one home in one afternoon. This illustrates that a growing number of buyers are gaining confidence in the market, and are looking to buy once again. We are specifically seeing increased interest at the entry level of the market. And when first-home buyers are active, it then instigates a positive flow-on effect through the rest of the market.
Currently, we are a long way from reaching a peak number of properties on the market. There are many who are waiting to sell – waiting for the economy to stabilise, or waiting for a more traditional ‘spring’ market. However, generally when there are more properties on the market, there is the potential for homes to remain on the market for longer periods of time. Additionally, as we’ve discussed in previous posts, seasonal expectations are definitely not as ‘seasonal’ or ‘traditional’ this year!
With this in mind though, we would expect to see the market begin to soften around September and October. Therefore, if you are thinking about selling in the next 12 months, now is a great time to reach out to our team to chat about your options.