OneRoof property report: How long will it take the housing market to recover from Covid-19?
New data revealing the financial impact of the Covid-19 lockdown on the nation's housing market shows the Bay of Plenty has fared better than most and is bouncing back.
Data crunched by OneRoof and its partner, Valocity, shows property values in the Bay of Plenty have risen 1.5 per centsince the start of the Covid-19 crisis, as measured by a new index.
This is despite a plunge in values during the four-week nationwide shutdown and a fall in national property values of 1 per cent.
On a more local level values have risen 4.6 per cent in Rotorua and only dropped 0.3 per cent in Tauranga.
OneRoof and Valocity created the new index to solve the challenges of measuring a housing market that suffered an unprecedented shutdown and faces an uncertain future.
The index sets as a baseline property values on March 25. Every sale since that date has been analysed and tracked, allowing subtle changes in the market to be measured.
The index shows the impact of the lockdown and the extent of the bounceback.
OneRoof editor Owen Vaughan. Photo / File
OneRoof editor Owen Vaughan said while the median house value in Tauranga was $700,000, up 6.9 per cent on the previous year, a lot of the increase in value had happened pre-Covid-19.
The index allowed OneRoof to track the changes in the market post-lockdown.
"We've charted the market from January 2018 to the start of June. We can see property values have risen steadily, dropped during lockdown, then gone back up again. Values have slid but not crashed."
He said the figures in Tauranga were positive.
"It's down 0.3 per cent which is good when we think about people saying property values would plunge. That's not a plunge.
"It's sitting around where it was going into lockdown so in Tauranga people can feel quite confident about the market the buyer and seller activity has been really sustained."
Tauranga Harcourts managing director Simon Martin. Photo / File
Tauranga Harcourts managing director Simon Martin said the volume of listings was exactly the same both pre and post-Covid-19 for the Tauranga market.
Not only that, but the number of listings was up this month compared to the same period last year.
He said they had seen "very little change" and demand was still "strong".
He described Covid-19 as a "health crisis", saying it could not be compared to the GFC and, for this reason, it was uncharted territory for the industry.
"We are still asking what way is this going to go?"
Interest rates were low, the rental market was booming and investors were also looking to cash in, he said.
Things were looking "very positive" and he said there was no evidence at this stage the wage subsidy or mortgage holidays ending would affect value or demand.
House values have only dropped 0.3 per cent in Tauranga. Photo / Getty Images
Tremains Bay of Plenty general manager Anton Jones said he believed "pent up demand" over lockdown meant the housing market made a swift bounceback.
Values did take a hit in mid-May but the "gap had closed" now, he said.
"It is early in the piece to say what might happen ... but it is all looking very positive at the moment."
He said properties at both high and low levels were receiving multiple offers and large interest.
Ray White Pāpāmoa and Mount Maunganui owner Greg Purcell said the market had not so much dropped and risen again but stalled.
Ray White Pāpāmoa and Mount Maunganui business owner Greg Purcell. Photo / File
"At level 4 ... everyone held their breath collectively waiting to see what would happen. We were put in a deep freeze for however many weeks so nothing happened.
"Then, at level 2, we started to hit third gear. By the time level 1 came, we came out of the blocks flying," he said.
"Nothing really changed except there was a black hole for a few weeks. We didn't go back, we didn't go forward."
Purcell said since things had resumed they had seen a lot of multi-offers and the under-$780,000 price bracket was booming, but the amount of housing stock was limited.
"I don't know what it's going to do next but people are moving back here [to New Zealand] and we're in an area that people want to be - the wider Bay of Plenty."
Valocity valuation director James Wilson said the way Tauranga had bounced back could be a reflection of the property market before Covid-19.
Valocity valuation director James Wilson. Photo / File
"There have not been many high bracket sales ... But we're seen first-home buyers continue to be strong in Tauranga."
However, he said house sales in the $750,000 to $1.2 million bracket were quite stagnant.
"It [the Bay of Plenty] was popular pre-Covid and it's stayed that way. It's a market that has got good employment as well.
"It doesn't mean we're going to continue to get capital growth but are we going to fall off the cliff? It's looking more unlikely."
Property values in the region have bounced back. Photo / File
REINZ chief executive Bindi Norwell said that, despite initial predictions prices could fall up to 16 per cent, they had been holding.
"Currently, we're seeing a lot of activity in the market, but what we need now is more listings to meet the level of demand."
Norwell said whether prices would be sustained long term could only be known once more data was released.
"It will take a number of months before we have a full understanding."
