New Zealand’s housing market is recovering well after the COVID-19 lockdown, new data shows – but skyrocketing unemployment and an end to the Government’s ‘mortgage holidays’ scheme could see prices hit hard in the months to come.

The Real Estate Institute of New Zealand (REINZ) made the warning on Friday in its new Residential Confidence Report, which was launched to track the impacts of coronavirus on the housing market.

Data from the report shows just over $1 billion of residential property was sold across New Zealand in April – a record low, and less than a quarter of the $4.4 billion-worth normally sold across the month.

REINZ CEO Bindi Norwell

Real estate market confidence shifts due to COVID-19 according to new REINZ report

There was also a massive drop in the number of auctions held, a fall in the sales price to valuation ratio and an increase in how long it took to sell property – but REINZ CEO Bindi Norwell says given the country was in lockdown for most of April, this is hardly surprising.

What was surprising was that house prices held across the month, and the country experienced a record median price for April.

“From a buyer’s perspective, the biggest difficulty faced during a recession or crisis is how much to pay for a property and there tends to be a fear around paying too much for a property as the market begins to find its new normal,” Norwell explained.

“Many people anticipate they will be able to get a bargain following these sorts of events, so end up making offers far lower than a vendor may expect.