The Government's announcement on Monday that Auckland would remain in an alert level three lockdown for at least another two weeks will be a blow to hopes of a bumper spring housing market.
The number of homes available to buy in the city has shrunk as a result of the Covid outbreak, with new listings for the month of September down 18.9% on August and 12.5% short of the September 2020 tally.
However, the city's shift from level four on September 22 and the easing of restrictions around viewings have boosted listings, with the tally for the whole of level three so far 184% up on level four numbers.
And in a further sign that the demand is still high, with the majority of houses sold in the city last month being snapped up within 35 days of hitting the market, according to figures the Real Estate Institute of New Zealand.
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Bryan Thomson, managing director of Harcourts NZ, said that the Auckland market had lost more than two months of activity as a result of the lockdown.
“It's a very unusual spring marketplace given the restrictions in Auckland," he said, adding that spring is a usually a busy period for agents.
“People selling or buying homes in New Zealand need to get on with life. You've got the crushing pressure of Christmas coming rapidly. People need to make decisions around getting set up for next year, for where they want to live, where the kids need to go to school, and all of the normal reasons that people transact property."
Thomson noted that strong sales during lockdown should give vendors confidence. “The successes during level four and level three has given people a lot of confidence that the market is strong and that there are really good results being achieved. That's encouraging (sellers) to come forward," he said.
Barfoot and Thompson managing director Peter Thompson says the agency's new listing numbers have risen. Photo / Fiona Goodall
“You've also got the built up pressure of people who couldn't sell during the extended level four particularly in Auckland, putting their properties on the market. So, while there are not as many listings as we need to satisfy demand, the listings are certainly coming forward and buyers should be encouraged by that.”
Barfoot & Thompson is also seeing the upward trend in listings. Managing director Peter Thompson told OneRoof: “An increasing number of vendors have been willing to brave the uncertainty brought about by lockdowns and list their property. In September, when there was no end to the lockdown in sight, we had 977 new listings.”
In the first 15 days of October Barfoot had 1386 new properties listed. “Whilst this is down by just over a third compared to the same period last year, it is a very clear signal that some vendors are keen to move forward despite some of the constraints posed by lockdowns,” Thompson said.
Not everyone is willing to list yet, as the lower listing numbers from last year suggest and many potential sellers are watching alert level updates.
Independent economist Tony Alexander said that while number of homes for sale would rise once lockdown was out of the picture, buyers and sellers shouldn't expect wave of listings that could fundamentally change the market.
One group in no hurry to list, said Alexander, were homeowners worried of not being able to buy again. “There are horror stories of people who have sold, and then cannot buy. They end up renting [but] never planned to rent.”
Alexander has also heard horror stories of people who have sold their home, and planned to rent while having a house built, just to have the cost of that new build blow out. “The example somebody gave me in an email, three weeks ago, was the price of their new build has gone from $1.2m to $1.7m in something like a six or nine month period. Vendors are very hesitant,” he said.
The current market was stressful for some, agreed Thomson. One way to overcome that is to sell first so you know how much money you have for your next property, he said. “You take the risk that it might take you a while to find the next property [and] you're hoping that the market doesn't get way ahead of you," he said.
“The other way [is] you go out and purchase your property before you've sold the one that you currently own. Lock it up with a bit of a longer settlement to give yourself time to sell your property. The only risk is that there's a major change in the market between when you buy and then when you come to sell yours.” Thomson doesn’t believe that’s likely to occur at the moment.
