Housing market will be 'relatively stable' despite Covid-19 upheaval

May 8, 2020

Former Property Institute of New Zealand CEO Ashley Church offers his prediction for how the property market will look during the pandemic compared with other recessions.

The New Zealand housing market is expected to be "relatively stable" despite the challenges faced by the likely recession in the wake of the Covid-19 pandemic, according to property commentator Ashley Church.

It comes after TradeMe's property arm recorded a 75 per cent drop in the average number of new properties being listed after the country entered Alert Level 4.

However, the online auction site also recorded a fifty per cent spike in rentals as Airbnb owners switched to a more secure source of income. 

"It's going to be interesting, and I think anybody you talk to is going to have a different view, but from my perspective, I think the market's going to be relatively stable," Mr Church, the former Property Institute of New Zealand CEO told Seven Sharp.

"I think that the sorts of things that might have caused it to drop away have probably been mitigated by things like the banks putting those support measures in place by the dropping of those LVRs (Loan-to-Value ratios), which are going to make it easier for people to get back into the market, particularly young people looking to buy their first home," Mr Church said.

He said after some banks dropped interest rates to below 3 per cent  on Friday will also "make it a little bit easier for people to get into the market and also for people to keep homes they currently have."

"Just in general, I think, the market holding up because fundamentals that were there prior to Covid-19 are still there."

Mr Church said there have been a number of positive things to have come out of rental market, including Airbnb units needing to be "switched back to normal rentals again", and accommodation rented by people here on short-term working visas will also re-enter the market.

"Those two things will contribute to, I think, keeping that rental supply reasonably stable and, one would hope, meaning that we're not going to see increases in rental prices that we've seen over the last couple of years."

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