Gautam Nayyar's new house in Kamo sits empty during the lockdown while he's been forced to rent elsewhere until the Covid-19 restrictions are lifted. Photo / Michael Cunningham
Northland's housing market— one of the best performing throughout New Zealand before Covid-19 — may have slowed from a boom to a trickle but real estate leaders are preparing to fire back into business once the lockdown is lifted.
Statistics released by the Real Estate Institute of New Zealand (REINZ) shows a record increase in Northland's median house price of 14.1 per cent to $565,000 in the year to March.
It was the third highest behind Manawatu/Wanganui (28.7 per cent) and Southland (28.2 per cent).
The Far North district is leading the charge in Northland, notching an increase of nearly 48 per cent in median house price in the last one year, from $440,000 to $650,000.
Kaipara came second at 28 per cent, followed by Whangārei at 6 per cent year-on-year.
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REINZ chief executive Bindi Norwell said more appraisals were completed in Northland in March and she expected that may continue throughout the lockdown period.
"Looking forward, it will be interesting to see what happens post-lockdown, but we expect some investors and buyers to return to the market."
Norwell said a lift of 14.1 per cent in Northland's median house price was driven in part by a 10 percentage point uplift in properties sold in the $500,000-$749,000 bracket and record median prices in the Far North District.
"Prices in Northland have been increasing for a number of months now and this is being driven by a lift in buyers from out of town looking for holiday homes, people trading up to bigger/more expensive properties as a result of confidence in the market, some uplift in
investor activity and a shortage of listings driving up prices.
"When you combine this with the low interest rates and more confidence from first home buyers it's not surprising that prices have gone up so much across the Northland region," she said.
OneRoof editor Owen Vaughan said unlike other countries like the US and Spain, New Zealand's housing market was in a "solid position" in that the impact from Covid-19 would not be as severe.
"People will still be searching for properties and doing their research during the lockdown period. There will be initial surge on the property market after the lockdown but I think we'll get a better handle in the weeks and months after that."
Whangārei insurance consultant Gautam Nayyar can not wait for the lockdown to end because Covid-19 restrictions have forced him to continue renting while his recently-purchased house is sitting empty in Kamo.
"That's an extra $270 a week I am paying and it's taking a toll as it means less income
coming in. But that's the harsh reality and I guess there are others in the same boat," he said.
Nayyar started searching for a house about an year ago while renting in Raumanga and managed to buy one in Kamo prior to the lockdown.
He was supposed to move in a day before the Level 4 lockdown kicked in on March 27.
Martin Dear from Barfoot and Thompson Whangarei is upbeat about the long term prospects of the housing market, saying the "lights" would come back on and people would get back to buying and selling properties.
• Covid19.govt.nz: The Government's official Covid-19 advisory website
"I think what we'll do is we'll just fire straight back into business. I think we're going to be quite busy either way. Often with a bust comes a boom."
Dear said people were sitting back watching and waiting to see what was going to happen rather than continue with listing.
"People can probably get through this, it's when the assistance is over and things get back to normal again, it depends what happens then."
Dear is prepping his sales people to get ready as Whangarei had been so busy he had added another tier of management to the business "and then bang, lights out".
Median house prices across New Zealand increased by 13.7 percent in March to a new record median price of $665,000, up from $585,000 in March 2019 and eight regions including Northland saw new record median prices.
Once the lockdown is downgraded to Level 3, real estate agents can enter peoples' homes but they cannot run open homes.
General manager of OneRoof.co.nz Vikas Verma said the need for social distancing during alert Levels 4 and Level 3 meant buyers needed different ways to view properties when physical access may be limited or impossible.
He said new and existing technology, such as virtual walkthroughs, 3D tours and online auctions, could make it easier for the housing market to continue to operate as the country fought the coronavirus pandemic.
Verma pointed to the new virtual viewing function and search tool that has been newly released on OneRoof as an example of the innovation taking place right now.
The OneRoof tools allow buyers to search the area they want to live and click on a virtual viewing button to find properties where a 3D or virtual walkthrough or video tour is available.
Latest property stats for Northland at a glance:
* Median house price up 14.1 per cent to reach a record $565,000
* Days to sell increased 5 days year to March, from 47 days to 52 days
* Sales up 4.8 per cent
* 197 houses sold in March compared with 188 at the same time last year