New Zealand property market looking positive post-COVID
Despite predictions of massive falls in house prices across the country, the median house price increased during the month of May.
According to real estate expert, Mike Pero, things are looking “very positive” for the property market in the months to come.
Pero, whose name is synonymous with real estate and mortgages, says there’s a massive imbalance between the number of people wanting to buy a house, and the number of houses on the market.
“As the world begins to work closer to normal again, contrary to the doomsday merchants we haven’t seen values plummet,” Pero said.
“Understandably we did see the volume of sales decrease in May, because literally people couldn’t get out to see houses. But, just as we have seen in retail, Kiwis have gone back out and are positive about spending and changing homes.”
“Early indications are good, values have not just held up, they’ve increased,” he said.
Nationally, year-on-year, house prices are up 6.9 percent from $580,000 to $620,000.
Excluding Auckland, New Zealand house prices went up 9 percent, and Auckland itself saw an increase of 7.1 percent in May alone.
Auckland’s median house price is now $910,000.
“Given we were in level 3 for most of May, that’s a really positive sign.” Pero said.
As Kiwis start to get out and about again, attendance at open homes and auctions has shot up too.
“There are people queuing up. Queuing for open homes and auctions. We have the lowest number of houses available to buyers as we have had in a number of years.”
“The indications are that everyone is still positive and happy to be back into the swing of things. Auctions and open homes are almost back to normal for Kiwis,” Pero said.
But potential buyers shouldn’t be put off by the rise in house prices, with record low interest rates meaning buying a house is more affordable than it has been in decades.
“If you’ve got a secure job and you’ve got the cash flow, and you’ve got the deposit, then now would be the time to be buying.”
“Look at your own situation, and regardless of whether values are up or down, it doesn’t matter because prices will always go up and down, they always will and always have so really it comes down to just doing it,” Pero said.
“Sure you might pay a little bit more each week, but a house is not like shares. It’s a home and it’s security. The difference between a good call and a bad call is probably the cost of a couple of coffees a day in the long run, and I don’t think that’s a huge cost.”
Pero says at current rates, if you’re looking at buying an $700,000 home and have a 20 percent deposit, your repayments are going to be around $523 a week * (based on current promotional home loan rates which may vary across lenders and over time, and a 30 year term).
“Not everyone has a 20 percent deposit, those with 10 a percent deposit will pay a little bit more with you repayments, but still about the same as renting,” he said.
“I remember interest rates being as high as 22 percent, this is as low as it’s gone for as long as I can remember.”
Pero says it is a real estate cliche, but he’s putting the call out to people thinking of selling their home to get moving, as there is a long list of potential buyers, and a short list of houses available for them to buy.
“Real estate agents are always going to say, now is the time, but it’s never been as true of a statement as it is now,” he said.
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