Last week, I sat down with Kelvin Davidson, Senior Property Economist from CoreLogic, to talk about the current real estate market, and share predictions of where the market is headed this year. Could house prices really drop by 20% as some forecasters envisage? When will the best time to sell be?
Contrary to what a lot of media reports purport, the outlook is more positive. We will not be back to pre-Covid 19 levels next month, or even this year, but the recovery from this pandemic will be much stronger and more immediate than other recent crises.
Looking back at past crises gives us a reference point for foretelling recovery from the current pandemic. The Global Financial Crisis (GFC) was a “U” shape event; it was a slow, steady recovery. In comparison, Covid 19 looks set to be a “V” shape recovery: we entered the crisis fast, and we will start to come out of it quickly. There are government subsidies in place aiding businesses, mortgage rates are historically low, and the LVR restrictions have been removed.
Crisis or no crisis, transacting in real estate will always be a constant. And there is nothing to indicate that the market will slow down in Christchurch presently. Pre-lockdown, there was an all-time low of stock on the market, and consequently as we come out of our “bubbles”, there is a recognised shortage of listings. This automatically creates a positive, competitive, buying and selling environment.
As we enter our second week at level 2, there is still a feeling of uncertainty in people’s minds, but there is also indication of increased activity and interest. I believe that there will be an influx of buyers in the next 4 – 6 weeks as certainty returns. If you were thinking of, or planning to sell in the next 12 months, then it would be well-worth considering moving your sale forward. In fact, I predict that June will be the “new spring”. The normal seasonality of real estate does not apply this year.
At Najib, we currently recommend a “soft-launch” approach to selling. We suggest exclusively marketing properties to potential buyers from our extensive database of clients, prior to public advertising. Not only does this provide opportunity for an off-market sale, but it affords market feedback and the ability to more accurately gauge a price guide for when – or if – a property goes “Live”.
To hear more about the economic impact on the real estate market, you can watch the full podcast with Kelvin at the link below. And if you are thinking of selling – or buying – or would simply like to chat more about the property market, please touch base.