New Zealand buyers and sellers can take heart from research that shows the Omicron waves in Australia and the United Kingdom had minimal effect on their real estate markets.
“The overall impact will be minor and short lived in New Zealand,” Bayleys head of insights Chris Farhi told OneRoof.
“In the short-term some vendors might delay their sale, resulting in a slowdown in new listings. This would mean buyers are competing for a smaller number of properties and could potentially lead to an increase house prices.”
Farhi said that Omicron peaked in the UK and Australian over the quieter Christmas holiday period, which mitigated any housing market disruptions.
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The key difference in the New Zealand market is that Omicron is striking at the start of the real estate industry’s peak period, with listings and sales usually ramping up in February and March.
“And widespread Covid is new to New Zealand. We’d always had low case numbers, even compared to Australia, but this time is our first time,” Farhi.
Bayleys’ head of residential sales, Johnny Sinclair, said that while agents and auctioneers were well equipped to operating remotely, Omicron still had the potential to disrupt the industry. Big numbers of people falling sick or isolating may hold up other parts of the sales process, such as meetings with individual sales people or processing contracts through lawyers.
Tom Bill, head of UK residential research for Bayleys’ global partner Knight Frank, said that the UK experience suggested the impact of Omicron would be low.
Once people realised Omicron was a milder Covid-19 strain, numbers recovered at open homes, he said, adding that the Covid-19 wave had had a negligible effect on price rises, although growth in 2022 is expected to be slower than in 2021.
In Australia, where nationally house prices rose 19% in the last 12 months, the outlook for the housing market is similar.
Michelle Ciesielski, Knight Frank’s head of research and consulting in Australia, said the market continued to operate remotely during the December Omicron peaks.
But auction activity picked up post peaks.
“It appears this has been driven by fewer people travelling over the holiday period and people trying to take advantage of a period of disruption in the market,” she said.
“So far we have not seen any material impact on sales numbers or sales prices.”
Mask-wearing in Sydney. Omicron peaked in Australia in December. Photo / Getty Images
Nerida Conisbee, Ray White’s chief economist for Australia and New Zealand, said this year’s Omicron outbreak hadn’t impacted listings in the same way as last year’s lockdowns did in Sydney and Melbourne, where cautious sellers waited for better certainty before flooding the market with housing stock.
“We are continuing to see an influx of properties come onto the market even though we have got Omicron,” Conisbee said. “In terms of listings I don’t think it will make a huge dint.”
However, hold-ups in new-build homes coming to market may deepen in 2022.
Both Connisbee and Farhi said supply chain problems affecting building materials would worsen because of Omicron.
“Omicron will continue to exacerbate that problem because the supply chains are continuing to be disrupted but also because people are getting sick and are unable to work for a period of time," Connisbee said
Both Australia and New Zealand face rising interest rates and uncertainty about access to finance, which are proving to be more of a challenge than Omicron.
“Even talk of interest rate rises has a psychological effect on the market,” Connisbee said.
