The REINZ Residential Confidence Report for April has shown that activity in the real estate industry was extremely subdued due to COVID-19. In April $1.051 billion of residential property was sold across the country, whereas during a typical April month we would expect to see around $4.358 billion, showing the effect that Alert Level 4 lockdown had on the residential property market in New Zealand.
Bindi Norwell, Chief Executive at REINZ says,“ While confidence is important for those working in the real estate profession, confidence in residential property is also closely linked consumer spending patterns, borrowing behaviour and other activities such as individuals’ ability to pay off debt or make investment decisions. Therefore, we felt it was important to start measuring how some of the metrics that impact confidence have been performing.
“Naturally, some of the indicators became quite marked during April, including a dramatic drop in sales volumes and the percentage of auctions held – although this isn’t entirely surprising given the lockdown. Additionally, median days to sell and listings increased and there was a slight falling in the sales price to valuation ratio. However, prices held and, in fact the country experienced a record median price during April,” she continues.
“With some anecdotal evidence that May activity is showing some signs of recovery, that would indicate some positivity. However, with a few more months before the banks’ mortgage ‘holiday’ period comes to an end, it could be some time before we see the true impact on the market,” points out Norwell.
Meanwhile, the number of properties sold during April dropped to all-time record lows with just over 1,300 properties sold during April. Unsurprisingly, sales volumes dropped steadily over the four weeks, with the last two weeks of the month seeing just over 200 properties sold each week.
– All content courtesy REINZ
About the Residential Confidence Report
The Real Estate Institute of New Zealand (REINZ) this week launched a new Residential Confidence Report which aims to understand the impact COVID-19 has had on the housing market and to track how the market is recovering. The report, based on weekly activity in the housing market, aims to look at the different factors in the market that indicate the level of confidence seen across the residential real estate profession. It will be issued monthly until we have a clearer picture of how the real estate market has responded to COVID-19.