A real estate bounce back

For now, at least, we’re seeing the property market pick up strongly since the COVID lockdown on Weekly listing volumes on are approx 40% up on the same time last year. We note that the listing stock on does not provide the complete picture but the trend is confirmed by CoreLogic who also reported an 11% increase in June sales volumes from June 2019.

Analysis of the current properties being listed in the market paints an interesting picture. The listing stock in both Wellington and Auckland is at the lower-value end of the market. In Auckland, for example, the median HomesEstimate of current listings is only $872k, over $100k less than the city’s HomesEstimate of $995k. The lower prices of current listings in both cities is largely a result of high numbers of Apartments being for-sale.

The listing stock is largely consistent with total housing stock in the other main centres except for Dunedin where current listings are priced well above the city’s median HomesEstimate of $525k. Another interesting insight is Napier, where vacant sections are forming 15% of the current listing stock. Maybe being locked down in someone else’s renovations has prompted many to build themselves.

Brad Olsen, Senior Economist at Infometrics, says the bounce back is set to continue, at least in the short-term, with the widely predicted market downturn pushed out to 2021.

The property market appears set to continue to rise unabated at present as pre-pandemic momentum and substantial economic support prop up activity. However, we expect that softer prices will begin to be seen around the end of the year.

Lower mortgage rates are encouraging for those wanting to get into the market, but lower availability of credit will keep a lid on activity. As the wage subsidy and mortgage holiday end, we’d expect that some parts of the country will start to show price declines as some become unable to meet their repayments and put their house on the market, pushing up sales.