Property market showing “some signs of recovery”

Here’s how the market performed under Alert Level 3 and Level 2, according to REINZ’s latest residential data.

As widely anticipated, the property market continued to feel the impact of Covid-19 restrictions in May, but not without some signs of recovery. Here’s how the market performed under Alert Level 3 and Level 2, according to REINZ’s latest residential data.

It wasn’t “business as usual” yet

Compared to April 2020, May saw a strong uplift in sales activity across the country, with the number of properties sold increasing by 191 per cent. However, due to restrictions and a low number of listings, sales numbers dropped by 46.6 per cent compared to the same time last year.

New Zealand spent the first half of the month of May at Level 3, and the second half at Level 2. As REINZ chief executive Bindi Norwell explained, Level 3 only allowed for two property viewings per property per day. And while rules loosened under Level 2, a 10-person limit on open-homes was still enforced.

“So, we are pleased that some real estate activity was able to go ahead, thereby starting to get the market returning to a sense of normality more quickly,” Norwell said.

May prices ‘slightly more reflective’ of Covid-19

Median property prices across New Zealand rose by 6.9 per cent from May 2019. But when compared to April 2020, performance was mixed: while some regions experienced increased volatility, three regions (Waikato, Taranaki and Tasman) recorded their highest-ever median prices.

“Median house prices in May were slightly more reflective of what we would expect to see as a result of a global pandemic, in that there was some volatility in prices with five regions seeing prices fall from April to May,” said Norwell. “But what continues to surprise us, is the fact that there are still regions with increases in median price and that there are still regions experiencing record median prices – a far cry from some of the doom and gloom predictions that were immediately touted when Covid-19 first hit the country.”

Days to sell hit longest in 111 months

The impact of Covid-19 was particularly apparent in the days-to-sell stats, which increased from 41 to 58 days when compared to May 2019 – the longest period recorded in 111 months.

REINZ expects days-to-sell figures to find their new normal soon, but according to ASB economists, current levels point to downward pressure on prices in the near future, with the possibility of a 5-10 per cent drop in the coming months. 

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