New Zealand is the envy of the world right now, with COVID-19 almost eliminated and society returning to a new kind of normal. The economic, political, and viral stability of the country has been linked to an uptick of interest in the property market, as offshore buyers look on closely, Kiwis return home, and city residents look forward to making a tree change in a post COVID world.
According to Vanessa Taylor, spokeswoman for Realestate.co.nz, international website traffic closely mirrored coronavirus numbers and domestic restrictions in New Zealand. Traffic slumped to its lowest point on April 2 when the country recorded its highest COVID-19 numbers, picking up from May 4 when case numbers started to drop and lifting slowly in June and July as restrictions were eased and case numbers dropped. While the ban on foreign buyers and lack of overseas arrivals will filter this interest significantly, demand is not going away any time soon.
Low COVID-19 case numbers and strong demand from returning Kiwis is likely to support prices in the months ahead, with house values across New Zealand in June remaining 9.2% higher than June 2019 at a median of $639,000. Outside the Auckland market in New Zealand's second lane, house prices were up even higher with 11.3% growth over the year at a median of $540,000. Buoyant market conditions fly in the face of what many economists were predicting just three months ago, with some forecasters originally expecting 10-20% price declines.
According to Real Estate Institute chief executive Bindi Norwell, there are many “factors supporting the market... There have been low interest rates, and wage subsidies, which have been helping people pay mortgages and rent. And we’ve also had mortgage holidays.” According to Norwell, returning Kiwis will also have a significant effect on property prices in months ahead, as more people look to return to the relative "safe haven" of a COVID-free nation. “Predictions are that up to 100,000 Kiwis could return home before Christmas if the Covid-19 situation continues in a similar fashion as we’re seeing right now,” she said.
“For many Kiwis this has marked the start of their return to a new life in New Zealand which includes purchasing a property for them and their family to live in, and reports from agents around the country are that returning New Zealanders make up a good proportion of buyers at the moment." said Norwell, adding "Agents have also been fielding calls from smaller numbers of non-Kiwis considering a move to New Zealand, but the foreign buyer ban is impacting their ability to purchase property and may impact their decision making process around whether they would consider a move to New Zealand in the future along with issues around visas, international travel.”