The final sales figures for the month of June have just been released by REINZ, and as expected the figures underpin what has been a growing confidence in the NZ public since the release from lockdown. While June has been the first full trading month for the Real Estate industry since lockdown, I think it is fair to say the results have surprised everyone.
The Real Estate Institute figures show remarkably similar trading conditions right across the country, so much so that June 2020 had more property sales occur nationally than any June for the last 4 years. In fact, nationally sales were up 7.1% in comparison to June last year. This result will be a comfort to buyers and sellers everywhere because with real estate so ingrained into our wellbeing and physic, it is important that the market is still performing in these stressful and uncertain times. Quite simply it provides us with confidence, and a sense of security when it is working well. Here in Christchurch we also followed the national trend, the stats tell us there were 588 house sales for the month, up 12% on last June. The median house price has also rose to $480,000 which is an increase of 9% on the same time last year. The days on market has dropped back to 44 days and I expect this to reduce to the more typical 35 days as the sale of stock listed pre and during lockdown gets sold. The market has been steady across price ranges and there has been increasing interest from first home buyers, investors and families, with the favourable lending conditions available. Interestingly the banks while offering low interest rates, are putting in stringent conditions for potential buyers before providing finance. So, while all this news is positive what does it mean? Lockdown created an artificial stop to the real estate market nationally, but we are now seeing life return to its routine with property sales also showing a degree of normality, with a bit of catchup. Currently the biggest issue facing our market is stock levels. Winter is traditionally a slower listing time so having extra pent up buyer activity occurring at this time is adding to the pressure in the market, especially on prices. Going forward all we can really do is make predictions. What we do know is that the subsidies finish in September and a lot of mortgages will come off payment holidays for people who chose this option. So, these two factors will most likely influence the market, or at least segments of the market. On the positive side, all the talk pre COVID-19 was that New Zealand was short some 120,000 homes. This is a situation that has not changed or disappeared. Experts are predicting that up to 250,000 kiwis will come home over the next 12 months as a result of COVID-19 and that represents another 100,000 homes being needed at average occupation levels. When you look at all these factors, I think that the sheer number of people looking for housing over the next year or so is likely to be huge. Assuming this is correct, then we are likely to see real pressure on housing and property values going forward. What we do know for sure is that June was a strong sales month here in Christchurch and nationally and based on what we are seeing currently, July should be similar. Leave a Reply. |
James Twiss
Licensed Business Owner of Harcourts Four Seasons Realty 2017 Ltd Greg Roberts
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September 2020
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