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NZ property market 'surprisingly positive'

Official sales figures for May are not due out from the Real Estate Institute of New Zealand (REINZ) until next week but real estate agents are reporting an unexpected high level of activity and strong prices.

Ben Macky of Wallace Stratton said that when Covid-19 hit he was predicting a very difficult year but since coming out of lockdown the company has seen multiple offers on properties and some selling for much higher prices than expected.

“There’s absolutely an appetite for property. Buyers are willing to spend money.

“We are consistently writing more deals than what we would have expected.”

The biggest handbrake was a reluctance from banks to lend to people in industries perceived to be risky such as hospitality, aviation and real estate, he said.

Managing director of Auckland’s largest real estate firm Barfoot and Thompson Peter Thompson said his company’s sales in the last two weeks were ahead of figures during the same period last year with median prices in May at $914,000 – only slightly below the March peak of $925,000.

“The market has rebounded really well, but we say that with caution,” he said.

Economist Tony Alexander said people seemed to have a more optimistic outlook than expected in a recession and this is important in the real estate market where attitudes drive decisions.

They are “pushing through the misery” and focussed on better conditions late in 2020 and early 2021, he said in a recent newsletter.

“This is why asset price weakness is likely to be substantially less than many might be thinking, and opportunities for low-priced purchases short-lived in duration.”

REINZ chief executive Bindi Norwell said there are some “tyre kickers” looking to pick up properties at bargain prices but for Frances Cook the cost of waiting to see whether prices would drop was offset by rent costing “an arm and a leg”.

“I’ve bought and sold a few houses before. You win some and lose some but you’ve got to be happy with where you’re living and make a long term decision,” she said.

 

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