First-home buyers flood property market amid COVID-19 pandemic

by Roxanne Libatique12 May 2020

It seems the COVID-19 crisis did not dishearten first-home buyers as they still try to get into the property market, taking advantage of record-low interest rates and the removal of loan-to-value ratio (LVR) restrictions.

The latest Trade Me Property Price Index revealed that younger people were browsing properties on the website more than usual, particularly at the end of April and beginning of May. Supply and demand also bounced back since the country’s shift from alert level 4 to level 3 lockdown.

“In the week following the Reserve Bank’s announcement, it was scrapping the 20% home deposit requirement. The number of 18 to 29-year-olds browsing property on Trade Me skyrocketed by 38% when compared to the same period last year. This is remarkable, especially considering we saw no change in browsing activity from other age groups,” said Nigel Jeffries, head of Trade Me Property.

“We’ve actually seen more buyers looking at properties onsite over the last couple of weeks when compared to the same period last year,” he continued. “In the first seven days of alert level 3, we saw a 10% jump in the number of views on properties listed for sale than in the same week in 2019.”

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The property price index found that the lower South Island received the most attention from those who want to climb the property ladder – with Queenstown-Lakes, South Otago, and Wanaka seeing the most significant jump in traffic on property listings.

“Of these, Queenstown-Lakes saw the biggest change during the first week of level 3, with an incredible 130% increase in the number of views on property in the district when compared to the same time last year,” Jeffries said.

Trade Me Property expects a boost of activity in the property market over the next few months, with a more robust winter period than usual.

“The pattern we have seen around the world resembles a tick shape recovery. We’ve seen a severe, immediate drop, which lasts three to four weeks, and is followed by a gradual recovery,” Jeffries concluded.

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