OneRoof property report: How long will it take the housing market to recover from Covid-19?
National house sales dropped 78.5 per cent in April as the alert level 4 lockdown strangled the market.
The Real Estate Institute has just released figures showing that only 1305 were sold last month compared to April last year when 6082 sales occurred.
Excluding the busy Auckland market, sales dropped 82.4 per cent, from 4357 to 767 as real estate agents were not classified as essential and the house sales market almost dried up.
Southland sales fell 92 per cent, Nelson was down 91.6 per cent, Manawatu/Wanganui down 87 per cent and Gisborne was down 86 per cent.
Bindi Norwell, REINZ said the figures were unsurprising because for 27 days in April, New Zealand was in alert level 4. Properties could only be sold remotely using online or phone auctions or digital technology.
Of the 1305 properties which did sell last month, 656 transactions were in the first 10 days. Only 272 sold between April 11 and April 20 April which included Easter. In the last 10 days, 377 properties sold.
Peter Thompson, managing director of Barfoot & Thompson, said earlier this month that many of that agency's April sales were under way before the lockdown started.
REINZ said Auckland appeared to be the least impacted. Its sale volumes only fell 68.8 per cent last month. Most of the transactions were in Auckland City with 172 sales, followed by the North Shore with 102 sales and Manukau with 92 sales.
New listings might help the market recover but Norwell cited unemployment and people's ability to get finance as factors which would affect sales.
"Talking to our members around the country, there are good levels of activity starting to occur with first time buyers and investors active in the market which is a positive sign. We expect this to pick up," she said.
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Median prices rose 17.2 per cent in April to a new record high of $680,000, up from $580,000 in April last year. Auckland's median rose from $847,000 to $925,000 – the second highest price on record.
Record median prices were recorded in the Hawke's Bay up 39.4 per cent to $648,000, Wellington up 18.3 per cent to $730,000 and Nelson up 22.8 per cent to $660,000.
"Median prices during April were less volatile than we anticipated, especially with such a significant drop in sales volumes, with median prices for the country showing a 17.2 per cent uplift on the same time last year to a record median high of $680,000," Norwell said.
National price and volume data in REINZ figures. Photo / file
"It looks as if the continued listings shortage has helped prices hold during April, however, as many of these sales will have been negotiated during March when confidence levels were higher than they are now, it's important to take this into consideration when looking at the figures," she said.
"We were surprised to see three regions with record median prices but looking into the detail of these regions, it's more to do with uplifts in the upper sales price brackets than an uplift in the underlying value in these regions. However, time will tell what the true impact has been," she said.
The REINZ House Price Index, which measures the changing value of property in the market, increased 8.5 per cent year-on-year. The index excluding Auckland increased 8.6 per cent from April last year.
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Owen Vaughan, editor of NZME-owned property listing platform OneRoof, said the REINZ data clearly showed what happened when the plug was pulled on the housing market.
"You get a black hole of nothing. But the big drops in sales volumes were always to be expected.
"The figures that matter most now are the ones that measure activity from alert level 2 onward. Will the removal of restrictions on open homes and auctions kick-start the market? Key to this is confidence that you have the financial security to buy and that you'll get the price you need when you sell," Vaughan said.
"What's problematic is that the housing market was already experiencing low sales volumes pre-Covid-19, with agents in many parts of the country crying out for more listings. On the plus side, low volumes and high demand could mean prices hold steady in certain locations," he said.
