Sales plummet as virus bites

Manawatu¯-whanganui house sales nose dived in April with 335 fewer sales.

Manawatu¯-whanganui’s 87.2 per cent drop in house sales in April put it in the ‘‘top’’ three regions with the biggest drops from the same time last year. Despite this, the region is the best performing over three months and second-best performer over 12 months nationwide, according to the Real Estate Institute of New Zealand (REINZ).

Palmerston North City and Rangitı¯kei District both achieved new record median prices of $595,000 and $386,000 respectively in April, despite 27 of those days falling in Level 4.

While April 2020 data starts to show the full effects of the restraints, REINZ spokesman Andy Stewart says there are many positive drivers that should help Manawatu¯’s recovery.

‘‘There have been many speculative reports attempting to predict what the local real estate marketwill do post lockdown. I’m certainly not bold enough to try and make toomany predictions, however I’m reasonably confident our local marketwill not take the predicted hit of a reduction in price by 10-15 per cent andwill return to some form of normality under the new norm.’’

The region is not solely driven by tourism and has more stable employmentwith Government and Defence, distribution centres, agriculture, primary industry, health and education sectors, so there is an expectation that it will not be affected as much as other parts of the country.

‘‘We also have major work and infrastructure projects, including the gorge road replacement and the proposed rail hub, which again will provide employment opportunities and bring money into our region.’’

Prior to lockdown the local real estate market was extremely buoyant; a seller’s market with many buyers and an acute shortage of properties.

Initial signs are looking positive for vendors wanting to sell, with multiple offers still being negotiated.

‘‘From my observations, so far this month, it certainly appears that real estate companies throughout the region are busy, incoming enquiry is encouraging, new listings are coming to market and sales are being made.’’

While the impact of Covid-19 on the housing market was to be expected during the severe Lockdown, there have been surprises, and what happens next will depend on a huge number of factors. These include the length of lockdown, level of unemployment, consumer and business confidence, people’s ability to access finance, and finance their own mortgages, and how long the wider economy takes to recover.

The number of properties sold in April across New Zealand fell by 78.5 per cent from the same time last year. Despite this, median prices rose 17.2 per cent to a record $680,000, from $580,000 in April 2019.

‘‘However, we caution being too optimistic untilwe get a few more months’ data, as many of the sales in Aprilwill have been negotiated during March, so it’s likely to be another month or so until we really see the full impact of the lockdown,’’ warns REINZ chief Bindi Norwell.

‘‘Key tomoving forward and helping the market to recover will be the number of new listings in May and consumer confidence, particularly in relation to ongoing employment and people’s ability to access finance.’’

Manawatu REINZ 2020 data:

Palmerston North: 117 sales March (median price $495,000), 9 April (median $595,000); Feilding: 29March ($480,100), 7 April; Ashhurst: 6 March ($444,000), 0 April; Rangiti¯kei: 26 March ($386,000), 6 April ($350,000); Foxton: 7 March ($390,000), 0 April; Foxton Beach: 7March ($458,000), 0 April.