"This is new territory for all of us"
The property market remained stable in the first three weeks of March despite the spread of the COVID-19 pandemic. However, it seems the alert level 4 lockdown worsened the impacts of the pandemic, resulting in a massive decrease in sales.
Quotable Value (QV)’s latest house price index revealed that the property market continued to perform strongly throughout early to mid-March before the alert level 4 lockdown, with 16 of the major cities showing positive quarterly value. However, the report confirmed that sales volumes for April dropped by 80% to 90% compared to the usual April activity.
The national average value increased by 7.1% year on year, representing a 3.0% increase over the past three months. Meanwhile, the average value in Auckland increased by 4.5% year on year and 2.9% over the last quarter – at $1,079,815.
“The data is skewed towards the earlier stages of the three-month period where sales volumes were high,” said David Nagel, general manager at QV.
Read more: COVID-19: Commercial property confidence slumps
Nagel said they are still unsure what lies ahead for the property market in the following months.
“For the last few weeks, we’ve all been guessing what the likely impacts of COVID-19 would have on the property market. But the truth is we’ve all been guessing as we’ve got no data to help us. This is new territory for all of us,” he said.
“From the limited sales activity that has occurred in April, most appear to involve properties listed prior to lockdown. Many of these would have had the benefit of open homes and viewings under pre-lockdown conditions. We’ve seen very few new listings as people take a wait-and-see approach as we try and find the new normal.”
“What happens to house prices beyond this point will be determined by market forces and the changes in supply and demand” Nagel concluded.
