Real Estate Market Confidence Report

There have been some encouraging signs for New Zealand's residential property market as we emerge from the lockdown restrictions posed by COVID-19. We take a look at data supplied by the new REINZ Residential Market Confidence Report.

Bank Lending Figures
Reserve Bank data found home loan borrowing increased by 57.1% from April. Although this is still down 33.3% compared to this time last year, there were positive signs for first home buyers in particular, with lending up 65.5% month on month. It will be interesting to monitor activity among investors in the coming months, with some banks indicating they will be easing policies for investor lending. Banks have also reported that some customers are coming off the "mortgage holidays" and resuming regular home loan payments.

Sales Count
Real estate activity strengthened in May. The last week of the month saw 1,372 sales across the country compared to just 355 sales in the first week of May. This compares to 1,700 a week for a standard month in May. REINZ expects to see property sales figures trend up, now we have emerged from strict lockdown restrictions. As a point of reference, sales activity has recovered at a faster pace than the GFC.

Median Days To Sell
The number of days to sell a home increased from 48 days at the beginning of May to 60 days to end the month. This was expected, given it was harder to sell properties listed just before or during lockdown while viewing restrictions were in place.

Median Price
Median real estate prices across NZ fell from $655,000 to $629,500. While prices dropped 9% from April's record, they were still up 7% from May 2019. Despite the uncertainty created by the global crisis, three regions - Waikato, Taranaki and Tasman posted record median prices.

Sales Price to Valuation Ratio
REINZ noted housing supply-side issues have contributed to an increase in the sales price to valuation ratio. This ratio lifted from 1.07 at the start of May to close at 1.11. This is a welcome signs for vendors, but not so much for first home buyers, investors and those hoping to pick up a COVID bargain.

New Listings
The final metric of importance saw new listings increase from 1,932 in the first month of May to 2,583 in the last week, demonstrating an improvement in vendor confidence that now is a good time to sell and receive a fair price for their property. REINZ notes "the market has rebounded more quickly than many expected."

Overall, the recovery in the residential property market is well underway. At Key Real Estate, we have heard from several clients preparing their homes for sale and eager buyers looking to enter the market. Check out the full REINZ Residential Market Confidence Report here and don't forget to check out our latest listings. Key Real Estate strives to provide the best real estate experience in Rotorua.

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