WHERE TO NEXT FOR THE HOUSING MARKET

KIm Rio from Cox Partners Estate Agents

During the past two months our homes have been thoroughly tested. We have been working from home and home-schooling our children.

In some cases, people have realised their homes are not suitable, and as a result the internet property portals are all reporting that audience activity rose by 50% during the lockdown. In some cases, this led to daily email enquiries doubling. With the move to Level 3 the early signs have been that much of the pent-up demand (which was cut off at the end of March) remains.

For this reason, buyers, sellers and agents are looking forward to resuming activities more fully. As we progress to Level 2 this week, what can you expect to occur in the real estate market?

Real estate strategist, Mike DelPrete, describes his observation that recovery in other world markets has the look of a tick (✔) – beginning with a severe, immediate drop, followed by a gradual recovery. Property economist, Kelvin Davidson (from Corelogic) is estimating a busy period immediately following the resumption of business, thanks to that pent-up demand which would see the market and prices hold. He predicts that things may get “tricky” during the winter months.

In the current low interest rate environment, economist Tony Alexander does not see too many people being forced to sell, and this limits the negative effect on prices. The other point Alexander makes is that those suffering the most in the economy will be people in tourism and hospitality and they tend to be younger, who do not tend to own a home or be planning to buy.

The true state of the market is likely to become evident in spring when mortgage deferrals start to end and homeowners who have lost income may have to reconsider their financial situation. One of the positives to come out of the lockdown, says Alexander, is that millennials will realise how much money they can save when they are not eating out and travelling. He sees this as an opportunity for them to enter the housing market.

And remember it is an election year, which usually means the Government is likely to spend more in the coming months to try to get confidence up and the economy kick-started.

As the country emerges from this pandemic there are several possible pathways the country could follow. Some are terrible. Others are pretty good, all things considered. None of them are guaranteed. What is guaranteed, is that we are here to help. Call us anytime on 06 835-4321.