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Jeff’s Two Cents: COVID-19 & Housing Market

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I think it is natural that some people are going to take a ‘wait and see’ approach. It may mean less listings and less buyers for a while, but as soon as there is a glimmer of normality, we should see a strong bounce back.

Here’s what we need to remember about the NZ housing market: it’s fundamentally strong. We’re very lucky in NZ that we have strong banks, low-interest rates, and a strong market. New stats released by the REINZ late last week showed that the median New Zealand house price increased by 14.3% in the previous 12 months and the average homeowners made $80,000 from these properties. This means we’re sitting on a fat buffer.

The reserve bank and the government are encouraging economic activity. I believe there are wins to be had for the buyers that are brave enough to keep going. Rich people make their best purchases in downtimes. There’s a lot of rich people around the world now that are buying when they see the right opportunity. There’s no reason why everyday Kiwis can’t do the same.

Additionally, the government has announced a $12.1 billion stimulus package. That works out to be $2,523.99 per man, woman, and child. Compare that to Australia’s $17.76 billion (NZD) package. Australia has a much larger population, and that works out to just $721.95 per person. That makes our stimulus package is significantly (3.5x) larger than the Australians’.

COVID-19 can and will have some effect on the NZ market, but what it doesn’t change is the fact that people still need somewhere to live. NZ still can’t build enough houses to keep up with demand.

At the end of last week, we have a number of my clients make offers and there are more making offers this week too. There are good deals to be had. Sitting on our hands does nothing for us or New Zealand.


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