OneRoof property report: How long will it take the housing market to recover from Covid-19?
An Auckland real estate branch gave a glimpse of the future this week when it sold three homes by online auction for $2.6 million, despite the city being in level 3 Covid-19 lockdown.
Remarkably, Auckland's median sale price also jumped 9.2 per cent to $925,000 during the lockdown compared to the same month last year - hitting the second highest price on record.
Yet against those numbers also came caution. Total April house sales in Auckland and New Zealand fell to a record one-month low.
The Real Estate Institute's house price index - which attempts to give a more accurate picture of overall home values than median sales price data - also showed a 1.8 per cent drop in values since the coronavirus hit.
Economists at Westpac now tip house prices to fall 7 per cent by the end of the year.
Despite the signs of trouble, Ray White's chief auctioneer John Bowring said the recent online auction sales by the company's Royal Oak branch showed there was still a deep buyer pool" ready to buy homes.
"We expect continued strong buyer competition and this is great for vendors considering selling or those currently on the market," he said.
The fruitful auction took place on Tuesday in the second week of alert level 3 with three out the four homes under the hammer selling.
Ray White Royal Oak owner Rohan Thompson said the highlight was the $1.105m sale of a three-bedroom at 116 Selwyn St in Onehunga, which went for $145,000 above its council valuation.
"This property attracted eight registered bidders, six of whom were active, and we were particularly pleased for the vendors as this one went live before lockdown, then kicked back off again, while still receiving offers prior to the auction," Thompson said.
The second home - a three-bedroom at 2 Tansley Avenue in Epsom - had two active bidders and five registered for a final $930,000 sale price - $110,000 below its CV.
"This home also went to market before the lockdown and we again received offers during the isolation period. The winning bidders were parents buying it for their daughter," Thompson said.
A renovated brick-and-tile unit at 2/16 Inkerman St in Onehunga was the final property to sell for $610,000, bought by an investor for $10,000 under CV.
This three-bedroom at 2 Tansley Avenue in Epsom sold for $930,000. Photo / Supplied
The home had been on the market for two weeks before lockdown and had been owned by the same family for 12 years.
While all the properties were successfully marketed and sold online, they did all have a period when they available to the market before New Zealand's hardline alert level 4 lockdown kicked in.
Most real estate agents agree that while the future of house sales will involve an increasing push to online, they also believe few home buyers will actually buy a house without first physically visiting it at some point.
And while the auction proved successful, Westpac chief economist Dominick Stephens was still tipping house prices to fall 7 per cent this year, based on the results of past recessions.
He said houses prices in the early-1990s fell 2.9 per cent, in 1998 they fell 4.6 per cent and in 2008/09 they fell 10.5 per cent.
"We are bracing for something in a similar range this time," he said.
This renovated brick and tile unit at 2/16 Inkerman St in Onehunga sold for $610,000. Photo / Supplied
"That said, the economy will come out of the Covid recession with extremely low interest rates and no loan to value mortgage lending restrictions.
"We expect house prices to remain very subdued in 2021, but to rise 11 per cent during 2022 in response to those low interest rates."
