The latest QV statistics make good reading for the Nelson housing market, but the post-lockdown predictions are for a cautious approach in the months ahead.
The real estate market has hit a wall of uncertainty as the industry enters “a completely different world” in the coronavirus pandemic.
Agents are predicting a nightmare April as buyers and sellers remain in lockdown, and predict the effects will be felt throughout the year with an expected shortage of houses listed for sale.
The CoreLogic QV House Price Index released this week showed the average value of property across New Zealand rose by 0.8 per cent over March, taking the three-month change to 2.6 per cent.
The level of property values hit $728,276 last month – up by 6.1 per cent from a year ago and the fastest rate of annual growth since the 6.9 per cent in August 2017.
In the Nelson region, values had risen by 2.9 percent in March to $657,225 while Marlborough was also up on the national three-month change with a 3.4 per cent increase to $513,656.
The March results showed a continuation of the market upturn that had been underway for the previous six to nine months, with all 16 major cities monitored showing quarterly growth for the fourth consecutive month.
However, with open homes cancelled and agents limited in their physical engagement since the March 26 lockdown, vendors were likely to play it safe in the months ahead.
Nelson-based Mike Pero Real Estate franchise owner Craig Hamilton said the current situation was unprecedented in the 16 years he’d been in the industry.
“I’d imagine most major franchises in town had pretty good February and March – as it was for us.
“We’ve had a good payday but obviously April is going to be a nightmare, we may as well write it off.”
Hamilton said the stock of houses available in the region during autumn and into winter “generally means more buyers than sellers.”
“It might be a carry-on of that shortage of supply but I don’t think we’ll see a whole lot of houses coming on the market all of a sudden – there will be people who are sitting pretty – I don’t think it’s going to change the market a whole lot once we get out of this either.”
“I don’t believe you can sell many properties online, I think there will be a lot of people who will sit back and wait until we can get back out on the street again.”
CoreLogic property economist Kelvin Davidson said although Covid-19 became more prominent last month, the real impact didn’t begin to bite until the first day of level 4 lockdown on March 26.
“We’re now in a completely different world, with no property settlements that involve the physical movement of people possible until at least the end of the current lockdown.
“This will have a major impact on the property market and relevant statistics, but the hope has to be that most sales activity is deferred rather than lost altogether.”
QV general manager David Nagel said the market will take considerable time to settle to a new normal after the lockdown ends.
With limited transactions likely after lockdown ends, buyers and sellers can expect a market filled with uncertainty at least through to the end of 2020 as the economy finds its feet again.
“What we do know is there will still be a property market. There will still be sellers, although likely only a fraction of what we’re used to. And there will still be buyers that have the means and confidence to purchase property.”
“What’s most likely is we will see transaction volumes drop significantly from pre-lockdown levels. House listings will dry up with only those having to sell, for work or financial reasons, wanting to enter an uncertain market”.
“Buyers that have the means will likely dominate the market, but with limited stock available buyers will probably exercise patience and this could force prices down for vendors that simply have to sell.