The number of house sales in New Zealand has remained stable despite the impacts of the COVID-19 pandemic on the market, but commercial property sales were not that lucky, according to real estate firm CBRE New Zealand.
CBRE's Transaction Monitor H1 2020 found that only 46 commercial properties worth over $5 million were sold in the first half of 2020 compared to 76 in the first half of 2019. The 46 properties were also worth only $961 million, half of the value of the 76 commercial properties at $1.89 billion.
“Clearly, recent sales volumes were influenced by the recent COVID-19 related lockdown that impacted both the supply of property coming on the market as well as purchasers' ability to engage,” CBRE said, as reported by Stuff.co.nz.
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Brent McGregor, the executive chairman of CBRE New Zealand, described the first half of the year as the most uncertain environment for some time as there were fewer commercial properties in the market than in the last few years despite having no shortage.
Low-interest rates keep the market resilient, but the re-opening of the borders was still needed to support the market.
“We haven't seen any real bargains out there yet, and whether that will happen or not that's yet to be seen, but with the lower interest rate environment, pricing could hold up pretty well still,” McGregor told Stuff.co.nz. “If interest rates stay low where they are, I don't believe we are going to see any dramatic problem. A lot depends on that.”
“It's certainly going to be helpful for the property market when the borders open up when tourism starts again when international investors can come and start looking around for New Zealand property, and that just improves the overall situation tremendously.”