A summary of some of the recent developments shaping New Zealand’s housing market over the last month.
Events over the last month have evolved at lightspeed, as the global COVID-19 pandemic sweeps the world, wreaking havoc on financial markets, employment and business confidence.
With New Zealand now on its highest alert level, shutting down all non-essential trade, travel and activity, the country’s real estate sector, like all corners of industry, is experiencing unprecedented challenges as physical events such as auctions, open homes and settlement inspections are paused until the alert level is lowered below level two.
Financial markets the world over have been hit hard by the COVID-19 pandemic, with grim economic forecasts the catalyst for swift action from both New Zealand’s Government and the Reserve Bank of New Zealand (RBNZ).
As New Zealand and the rest of the world continues to record new cases of the virus, the impact of a level four lockdown is having immense and far-reaching effects for all corners of Kiwi life.
In a spectacular move on March 16 the RBNZ slashed the Official Cash Rate (OCR) by 75 basis points to a new record low of 0.25 percent, with the latter half of the month characterised by equally dramatic emergency support relief aimed at assisting New Zealand’s most vulnerable during the anticipated recession.
Amidst all the data and projections for market performance however, the mood across financial markets appears to be calmer with an air of resiliency.
Several key factors place New Zealand in a better financial position to weather the storm when compared with previous market downturns, and it has been reassuring to see aggressive fiscal support aimed at keeping business afloat and more Kiwis in jobs.
During times of uncertainty, perspective is key and the incredible upswing in property values over the last ten years may offer some solace to those worried by negative projections. This, paired with careful debt management by retail banks and the RBNZ will cushion the blow of the recession for some homeowners.
Kia Haumaru Aotearoa.
• The New Zealand Government releases a monthly Property Focus report, pulling out all the stops to protect New Zealanders and the economy from severe financial hardship.
• In its latest $12.1 billion economic response package, ANZ Bank investigates the outlook for funding markets and credit availability during the present market downturn.
• Westpac economists expect that unemployment will reach nine percent, and house prices will decline by seven percent during the COVID-19 economic fallout.
• While the long-term picture for the housing market remains positive, near-term expectations are for significant disruption, but how long will it take New Zealand’s economy to recover from COVID-19?
• The New Zealand Herald’s property portal One Roof surveys some of the country’s property experts to find an unexpected silver lining to COVID-19 induced uncertainty.
• CoreLogic notes some of the most important market implications of COVID-19 for the housing market.
• The New Zealand Government, retail banks and the RBNZ have announced a major financial support package for home owners and businesses affected by the economic impacts of COVID-19.
• The Real Estate Institute of New Zealand (REINZ) offers a best-practice approach on how best buyers and sellers can navigate the nation-wide lockdown as property auctions, inspections and settlements grind to a halt.
• The Government has introduced a rent freeze for residential tenancies, causing some landlords to question whether there is a bias that exists in favour of tenants.