NZ house sellers still confident: Can it last?

Would-be sellers have not let a global pandemic dent the price they want for their houses, new data shows.

Property listings site Realestate.co.nz has released data for May, showing average asking prices have reached a record level in seven regions of the country.

That is despite predictions that house prices could fall by up to 15 per cent this year as unemployment increases.

‘‘There is a lot of speculation around post-lockdown property prices but average asking price highs in seven regions suggest that most vendors are still expecting high prices for their properties,’’ Realestate.co.nz spokeswoman Vanessa Taylor said.

She said traffic to the site was equal with that of February. New listings numbers dropped in May but were comparable with past winter months, Taylor said.

Nationally, 8324 new listings went on to the market in May, down 12 per cent on May 2019.

Nationwide, there were just over 19 per cent fewer homes available for sale in May compared to a year earlier.

But Central Otago Lakes went against the trend, with a 13 per cent increase in properties for buyers to choose from. New listings there were also up 21.8 per cent year-on-year. The region’s average asking price dropped 15.8 per cent year-on-year to $972,073.

Queenstown is expected to be one of the regions most affected by the economic impact of the Covid19 outbreak because of its reliance on tourism and a high proportion of its properties listed on Airbnb.

Ministry of Social Development data shows the number of Queenstown/Lakes residents on

JobSeeker Support lifted from 38 in February to 472 in April.

Nationally, the average asking price was up 10.3 per cent in May compared to the year before.

Manawatu/Whanganui hit a record high of $495,294 in May

2020, an increase of 24.8 per cent on last year, while the Central North Island climbed 20.1 per cent to $565,636. In Taranaki, the average asking price tipped over $500,000 for the first time since records began in 2007 with an increase of 16.3 per cent compared to the same time last year.

Auckland’s average asking price was up 9.9 per cent year-onyear to $961,686, Wellington’s up

6.1 per cent to $725,989 and Canterbury’s up 10.7 per cent to $556,476.

Economist Brad Olsen, from Infometrics, said the property market seemed to be ‘‘barrelling on’’ even though the economic fundamentals were shifting.

He said it made sense that asking prices would hold up given the resurgence of activity in May after a locked-down April.

‘‘With the wage subsidy supporting nearly 60 per cent of the New Zealand labour force, and 71 per cent of Kiwi businesses, the full shock of Covid-19 hasn’t registered for households yet.’’

But he said there were still signs of softening. ‘‘Lending data shows that between February and April 2020, there was a $13.8 billion increase in interest-only property lending. Added to this, a Commission for Financial Capability survey found that 10 per cent of households had missed a housing payment (rent or mortgage), with just over a third of New Zealand households experiencing financial difficulties.

‘‘As the economy starts to get back on its feet, and the reality of large job losses, lower hours, and tighter household budgets sets in, I’d expect weakness to start emerging in the property market.’’