New Zealand’s successful response to containing the Covid-19 crisis has not only won global praise, it has also retained the core strength of the economy making now is a good time to sell your home. This strength is most evident in the property market where keen buyer interest continues, despite social distancing restrictions and the nationwide lockdown.
How have house prices been affected?
The property market was performing well before the lockdown with median prices for March up nationally 13.7 per cent. Eight regions across the country set new record median prices, including Auckland where median house prices increased 11.1 per cent to a new record median of $950,000, Wellington and Canterbury. Despite the Coronavirus pandemic, confidence among buyers has remained.
For sellers who choose to wait until after the pandemic to sell, Jeremy Couchman, Kiwibank senior economist, said the Real Estate Institute of New Zealand data provides an insight into the impact on the market following the lockdown with Kiwibank’s economics team forecasting an annual 9 per cent house price fall. “A 9 per cent annual house price fall would be similar to the low seen during the GFC,” Couchman said.
Who are the buyers?
The housing market was powering along before the pandemic arrived with the major cities in high demand, especially from young buyers seeking to enter the market. Investors too are increasingly expressing interest in the property market, moving their cash from financial markets to a safer, low-risk investment.
Government and bank incentives
The government’s Coronavirus support package will help ease the economic impact and the budget set to be announced in May promises more stimulus to the economy, helping to keep buyers in the property market. In addition, mortgage rates remain low thanks to the Reserve Bank’s money-easing policy in response to the pandemic.
Banks also remain stable, which makes the Covid-19 pandemic very different from the Global Financial Crisis that took place a decade ago. While it might be harder to lend following the end of the Covid crisis, it doesn’t look like it will be as tight as it was in 2008. Credit availability will also likely remain strong.
The Covid-19 pandemic won’t last forever if you’re ready to sell and you already have somewhere else to live, meaning, wNow is a good time to sell your home.