The COVID-19 crisis has impacted individuals and businesses in New Zealand, and the lockdown had devastated various markets further. However, a joint report by OneRoof and Valocity has revealed that the property market's condition during the lockdown ended up better than what experts had expected.
The joint report focused on the financial impact of the COVID-19 lockdown on the country's housing market. It showed only a 1% drop in property values since the beginning of the pandemic despite the lack of activity due to COVID-19 restrictions.
Owen Vaughan, the editor of OneRoof, said the latest data has proven that the housing market is did better than what experts forecasted at the beginning of the pandemic.
“While the full impact of COVID-19 won't be clear until mortgage deferrals and the wage subsidy scheme come to an end, it seems the housing market has rebounded from the lockdown,” Vaughan said, as reported by NZ Herald.
“The index shows that values in many locations are back to where they were at the start of the year when the market was starting to run hot. The question for buyers and sellers is whether or not the bounce-back will be short-lived.”
Read more: S&P predicts 10% drop in house prices
The report revealed that 12 of the 16 major regions had seen declines in property values since March 25, while those in the remaining regions have stalled.
The best-performing regions were Lower Hutt (up 1.1%), Rotorua (4.6%), Waikato (4%), Matamata (3.7%), and Kaipara (3.1%) despite low sales volumes.
In contrast, the worst-performing regions include North Shore (- 3.8%) and Christchurch (-3%), Queenstown Lakes (-7.7%), Far North (-4.4%), Waitaki (-3.9%), and the Coromandel (-3.8%)
“When we looked at the market using traditional methodology, comparing activity now to activity 12 months ago, we saw that only two territorial authorities – Kaipara and Selwyn – have seen declines in property values and that 38 have enjoyed more than 10% growth,” said James Wilson, a valuation director at Valocity.
“This gives a false impression of what's going on in the market. Yes, property values are up, but that's more a reflection of the fact that these locations were experiencing value growth in the three to six months before lockdown.”