How hard has the real estate market been hit post-Covid-19?
That’s the question that a lot of potential buyers and sellers are asking, especially during these economically challenging times when people have lost their jobs or had to take pay cuts.
With house prices showing a trend of shooting through the roof pre-pandemic, is it downhill from here?
The number of properties sold in May across New Zealand decreased by 46.6 per cent from the same time last year – from 7477 to 3990 – as Alert Level 3 restrictions on the real estate market still made it difficult for property sales to occur, according to the latest data from the Real Estate Institute of New Zealand (REINZ).
Yet there was a strong uplift from sales activity from April to May, with the number of properties selling nearly trebling from during Alert Level 4 – from 1371 to 3990 – a 191 per cent increase.
For New Zealand, excluding Auckland, the number of properties sold decreased by 47.4 per cent when compared to the same time last year (from 5464 to 2873).
In Auckland, the number of properties sold in May decreased by 44.5 per cent year-on-year (from 2013 to 1117).
Again, there were no regions with annual increases in sales volumes during May. However, all regions had an uplift in sales volumes from April.
Selling properties during lockdown-Paul Judd
Paul Judd, branch manager and auctioneer at Pakuranga & Howick Realty, says it’s too soon to say if there will be a downslide in property sales post-pandemic.
He goes on to add that P & H Realty made quite a few sales during the lockdown.
“We were selling properties during lockdown by email and video conferencing. On April 1, I did an auction on Zoom. The process took a lot longer than usual but we sure were busy,” he says.
“There were some motivated buyers who had seen the properties before we went into a nationwide lockdown and were keen to go ahead with it.
“The difficult factor was the settlement and the change of clause in contracts.”
Judd says that while it was legal to move to a new home in level 3, there was no availability of movers so people had to wait.
“I went into lockdown thinking it would be a holiday but it was very busy dealing with lawyers. Right now, we need more listing as there are more enquiries than properties in the market.”
He admits there was a bit of fear factor involved about new home-owners being concerned that the property they had just bought during these unprecedented times, may take a hit in pricing.
“Some of those who bought a new home just before lockdown were worried that the house prices may fall,” he says.
Having been in the real estate industry for more than three decades, Judd says this is a good time to buy with such low-interest rates.
An interesting trend he noticed is of families showing a cautious interest in bigger houses post-lockdown.
“With everyone at home 24/7 they realised they need more space,” he points out.
On the other hand, he says that “business has gone ballistic in terms of interest in buying sections. It looks like the builders and developers are not scared off by Covid-19”.
An upward trend in house prices – Aman Pannu
Aman Pannu, owner of Harcourts Botany, says that Covid-19 has definitely not dampened the real estate market. On the contrary, there is a definite upward trend.
Harcourts Botany has been selling properties at a higher price than pre-Covid-19, says Pannu.
“We’ve signed 16 agreements in the last three weeks,” says the award-winning real estate agent.
Giving a case example of the property he sold prior to the lockdown he says he sold a property at 126 Edgewater Drive at $1,065,000
“Now a property next-door, at 124 Edgewater Drive that was listed during Level 3 Covid-19, has already evoked an interest of $1.1m before going to auction. It’s $35,000 more.”
Aman says that buyers from America, China and India have shown a lot of interest too.
“People with liquid cash realise that real estate is the only secure investment that gives great returns.”
Sales are galloping – Angela Rudling
A successful real estate agent with Bayleys, Angela Rudling says property sales are galloping at the moment. The future is not bleak.
“We are swamped with enquiries and activity – it’s all very positive,” she says.
House prices are steady at the moment, she says..
When asked if the virus has had a damaging effect on the economy with the loss of jobs and a downturn in the property market, she says that every situation is different, “but at present, we seem to have ample buyers and not so many homes”.
New listings down, but still ahead of usual winter levels
Real-time data from realestate.co.nz shows all-time average asking price highs in seven New Zealand regions.
Vanessa Taylor, spokesperson for realestate.co.nz, says: “There is a lot of speculation around post lockdown property prices but average asking price highs in seven regions suggests that most vendors are still expecting high prices for their properties.”