Association says it is still too early to confirm that the market is fully recovering
As New Zealand continues to recover from the COVID-19 restrictions, the housing market has started showing signs of confidence, according to the latest data from the Real Estate Institute of New Zealand (REINZ).
The latest edition of the REINZ Residential Market Confidence Report showed an increase in the number of properties sold throughout May 2020 and listings slowly returning to normal levels.
The sales price to valuation ratio and the percentage of auctions also saw an uplift during the same period, with the latter just 3% points behind last May's figures.
Read more: Report reveals signs of recovery in May
“There is still some volatility in pricing as the market tries to find its new price point, and the median days it took to sell a property increased as the tail of alert level 4 lockdown continues to impact sales data,” said Bindi Norwell, the chief executive of REINZ.
“Overall though, we are starting to see some positive signs which will be of some comfort to the likes of the banks, economists and even consumers who have been holding off selling their property until they feel like there is more certainty in the market.”
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Lending to first-home buyers also became more favourable than to investors, with an uplift of 65.5% and 59.5% respectively in May than April.
However, Norwell warned that it is still early to confirm that the market is fully recovering.
“After a 24-day streak of being COVID free, the country now has a number of cases, and the health experts keep warning us this figure will continue to fluctuate over the coming weeks, undoubtedly knocking people's confidence – particularly after some of the revelations around testing at the border and in isolation centres,” Norwell said.
“Additionally, we're still a number of months away until the six-month ‘mortgage holiday’ period comes to an end. While a number of the banks have reported that customers are slowly coming off the ‘holidays’ and resuming regular payments, the majority have not.”
“The second wage subsidy is also still in effect, which will be bolstering employers and employees with rent and mortgage payments over the coming weeks. So, to use a running analogy, the finish line isn't quite in sight just yet,” Norwell concluded.
