Covid-19 Update: Week Three
As we head into the final week of the initial level-4 lockdown and talk about the possibilities of easing the restrictions at the end of Level four, there is still quite a lot of uncertainty about how the market will look and where it will head in a post-coronavirus world. There have been some new initiatives from the government to help, and data from last month suggest that the market was strong pre-lockdown and could offer some security moving forward.
Here’s the latest:
The Housing Market was Strong in Auckland before Lockdown
New data from The latest Real Estate Institute of NZ has revealed that the market was heading to a new peak in sales before the Coronavirus brought things to a standstill, with Auckland, in particular, being a standout. In Auckland, sales were particularly strong, with 2307 properties sold in March which were up 10.8% compared to March last year, with a record median price of $950,000, up 11.1% from March last year.
For the rest of the nation, the data shows that the median house price hit a new record of $665,000 in March, up from $640,000 in February and up 13.7% compared to March last year, suggesting that trading was quite strong leading up to the lockdown, with 6866 residential properties sold in March, down just 4.8% compared to March last year, even though events such as open homes, private property viewings and personal meetings came to a halt two-thirds of the way through the month.
REINZ Chief Executive Bindi Norwell admitted that there is still uncertainty on what the market will look like after the lockdown lifts, ” The impact will depend on a huge number of factors including how long the country is in Alert Level 4 lockdown for, the level of unemployment, consumer and business confidence levels, people’s ability to access finance and finance their own mortgages and how long the wider community takes to recover.”
Norwell also commented on the “grey area” of what a potential Level Three lockdown move could look like for the market, stating that the industry would need a clear understanding of what could be done at level three, she said. “We’ve done two and four but three is a bit grey for some.”
But what may surprise some is the impact the lockdown may have on the future of interacting with customers, with any salespeople were using this time to connect with customers and build relationships online, and some using virtual viewings and auctions to keep activity going, Norwell said the experience could create a permanent change in the industry.
“Some of this new way we’re working may continue. There’s a whole lot more engagement, people feel like they are speaking to a lot more people. Even though it’s different we might carry on with some of those things – virtually through meetings and also a bit more online innovating in that way. Although it’s tough some good may come of it.”
Government To Push Infrastructure Spending
The government has been taking a proactive stance on addressing the economy throughout this pandemic, one of its announcement that affects housing included a plan to boost infrastructure spending and bring forward the timetable for many planned infrastructure projects.
The benefits of this will go well beyond just providing wages and revenue for the workers and companies involved in these projects. It should start to relieve the pressures that have built up over many years in areas such as housing and transport that have weighed heavily on our daily lives.
Although the benefits of these projects may take several years to become apparent, the fact they are being addressed provides hope that no matter how hard the difficulties we currently face are, life can get better.