Real estate agents in Auckland are reporting increasing interest in properties selling for under $1 million dollars.
The Real Estate Institute NZ is putting the spike down to a ‘post lockdown catch-up’ and is cautious as to whether it will continue.
“I think it's a bit early to tell and the key indicator will be the level of unemployment over the next few months,” says Bindi Norwell, REINZ Chief Executive.
“But at least things are starting to pick up again now.”
First home buyers were out in force at open homes in Auckland visited by 1 NEWS today.
Many were keen to get a foothold on the property ladder and unconcerned by speculation that the market is likely to fall as the impact of Covid-19 continues to bite.
“We’re not too sure about what's coming up in the near future but better now than never,” one prospective buyer told 1 News. He said low interest rates and recent scrapping of LVR restrictions made for favourable buying conditions.
Another prospective buyer told 1 NEWS she and her partner had been looking for over a year and felt now was the right time to buy.
“If you're fortunate to get a house when prices drop then good on you,” she says. “But I don’t know – if you wait it (the market) changes all the time.”
Another buyer said he’d noticed more houses were coming on the market and that he’s seen properties were selling well at online auctions.
Low interest rates, Kiwis returning home, the removal of LVR restrictions for 12 months and high rents were the main reasons buyers gave for wanting to buy.
Sharon Zollner, ANZ Chief Economist, concedes record low interest rates and the relative ease of completing sales transactions at Level 2 are undoubtedly contributing to the "flurry of activity in the housing market."
However, Ms Zollner says a range of factors affect the housing market.
“The low mortgage rates we're seeing at the moment will definitely be sparking some interest,” Miss Zollner says.
“But the fact is we do see the unemployment rate rising to double digits later this year and that typically does put quite a lot of pressure on the housing market.”
The ANZ economist is forecasting a sharp fall in the economy later this year.
“We do think house prices will fall,” Ms Zollner says.
In the meantime, some buyers are proceeding with purchase plans after doing their sums and thinking things through during lockdown.
“It gave you more time to focus on yourself and your goals,” one house-hunter said as she headed into a property.
National sales data that will paint a full picture of New Zealand’s real estate market will be released next month.
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