It is still early days and we may see further impacts on the economy and therefore the housing market

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When the country first went into lockdown back in March there were concerns that there would be a significant impact on the number of properties sold. However, new analysis from REINZ shows that Auckland has already caught up and the rest of the country is quickly catching up.

At the end of July, the number of properties sold in Auckland was up 1.7% when compared to the first 7 months of 2019 – with an additional 209 properties sold. With solid sales volumes in June and July, the West Coast is the next closest region to recovering from the effects of lockdown, down only 25 property sales (8.4%) compared to the first seven months of 2019.

Still someway from returning to similar sales volume levels as 2019 is the Gisborne region. Sales volumes are down 26.4% (101 properties) when compared to the same period last year partly the result of a significant listings shortage.

Bindi Norwell, Chief Executive at REINZ says: “No one could have predicted just how the residential property market would be impacted from COVID-19. If you’d have asked people back in March how long it would take to recover, the answers would have varied from months to years. Even just a few weeks ago, people were still predicting that the next few weeks might look more like a post-GFC environment, so to have this level of turnaround already is surprising.

“The fact that the Auckland region has already seen more properties sold in the first seven months on the year when compared to 2019 is astounding. Looking at the data on a month-by-month basis, it may not be too long until the rest of the country has caught up or even surpassed last year’s sales volumes – especially as June and July saw most regions, albeit with just a few exceptions, surpass last year’s sales volumes by a significant percentage,” continues Norwell.

“However, what’s really interesting, is that most regions saw more residential properties sold in the month of July than in March. This is a very unusual situation, as normally March is one of the busiest months of the year for residential property sales; and it just goes to show what a strange year 2020 has turned out to be,” she continues.

Looking into the reasons why the market has recovered so quickly, it appears there are a number of factors contributing.

“Part of the uplift is a result of this pent-up demand we’ve seen for a few months, but it’s coupled with the return of ex-pats from offshore, the low interest rate environment and also the wider confidence people have in the market thanks to schemes such as the mortgage holidays and wage subsidies,” points out Norwell.

“It also has to be said that both real estate agents and consumers have responded extremely quickly to the move to virtual and online sales tools, and that certainly will have aided the market’s recovery,” she continues.

“Even though the country has moved up in the Alert Level system in August, everything we’re hearing from agents around the country is that everything is continue in a normal fashion as much as possible, and that anything that can’t be done in person has just moved to a digital format. Therefore, we would expect another busy August if things continue on in the same manner,” she continues.

“However, it is still early days and we may see further impacts on the economy and therefore the housing market,” concludes Norwell.