The property market had been performing strongly at the beginning of March. However, as COVID-19 spreads around the world, Quotable Value (QV) revealed that the market slowly became affected.
The latest QV House Price Index found that all 16 major cities showed quarterly value growth for the fourth consecutive month – with the average value now at $728,276, a 2.6% increase over the past three months.
However, QV general manager David Nigel said the market has started seeing the impacts of COVID-19 in the last week of the month.
“Real estate agents and developers were rushing to get homes listed in anticipation of a change in the playing field. [However], purchasers were less bullish and less willing to commit as the market was heading into unchartered territory. Then everything changed on 25th March,” Nigel said.
“Nobody knows what post-lockdown market conditions will look like. We’ve never been through anything remotely like this. We also do not know how long this will last. What we do know is that there will still be a property market. There will still be sellers, although likely only a fraction of what we’re used to. And there will still be buyers that have the means and confidence to purchase a property.”
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Nagel expects the supply of houses for sale to decrease as most Kiwis would more likely stay at their current home during the lockdown and looming recession. However, some might be forced to downsize or even relocate to seek employment.
“Buyers that have the means will likely dominate the market, but with limited stock, available buyers will probably exercise patience, and this could force prices down for vendors that simply have to sell. But by how much? Nobody knows,” he continued.
“The market will take considerable time to settle to a new normal after the lockdown ends. There will be pre-lockdown transaction settlements that will occur, plus a very limited number of transactions that occurred during the lockdown. But with limited transactions, after lockdown ends, we can expect a market filled with uncertainty at least through to the end of 2020 as the economy finds its feet again.”