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Property market report

Prior to the outbreak of COVID-19, NZ’s housing market had started to build up a head of steam. The pace of activity had clearly lifted –monthly house sales over the past couple of months have been running about 10% above year-ago levels. And with listings still perplexingly low, the faster pace of sales was chewing up much of the remaining inventory sitting on the market. This imbalance between demand boosted by tumbling mortgage rates, good wage growth, and the return of investor interest–coupled with weak supply saw markets in most parts of Auckland tighten up. The national median number of days to sell a house fell to 28. Annual house price inflation climbed to 8.7% YOY in February, having been scratching around barely above 1% as recently as April of last year. The short-term indicators of house prices, days to sell a house, and sales-to-listings ratio generally point to the upswing continuing. Except the game has now changed. The disruptive effects associated with the containment of the COVID-19 outbreak will tip both the NZ and global economies into recession. This backdrop of generalised economic uncertainty, plunging business and consumer confidence, doubts about employment prospects, and wealth and income declines will have implications for the property market. The historical precedent, is relatively clear. The impact of social distancing measures (will we continue to have open homes, public auctions?) presents an extra layer of uncertainty relative to past house price cycles. In the least it is likely we’ll see the pace of housing activity/turnover throttle back, which will deliver a downward pressure on property prices. All of this has forecast annual house price reductions, and the annual inflation is expected to slow to zero by March 2021. Further ahead, assuming the outbreak can be restricted and economic activity recovers, we expect house price inflation to turn higher from around Q4 of this year, driven largely by recent and likely future cuts to mortgage rates.

Let’s look at the sales results:

Hobsonville Residential                           $605,000 to $1,355,000

Massey Residential                                 $565,100 to $1,477,500

Swanson Residential                               $490,000 to $1,425,000

Waitakere Residential                              $731,500 to $1,480,000

West Harbour Residential                        $680,000 to $2,880,000

Westgate Residential                               $670,000 to $928,000

Whenuapai Residential                            $850,000 to $1,284,000

We have a big cupboard full of buyers and the banks are saying yes more than they are saying no. Therefore if you would like to sell...it’s time. Call me today on 0800 900 700, text me on 027 632 0421 or email me at graham.mcintyre@mikepero.com. See more at www.grahammcintyre.co.nz - Mike Pero Real Estate Ltd Licensed REAA (2008).

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April 2020

the Westerly April 2020

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