An aerial view of Rotorua. Photo / Getty
New data revealing the financial impact of the Covid-19 lockdown on the nation's housing market shows the Bay of Plenty has fared better than most and is bouncing back.
Data crunched by OneRoof and its partner, Valocity, shows property values in the Bay of Plenty have risen 1.5 per cent since the start of the Covid-19 crisis, as measured by a new index.
This is despite a plunge in values during the four-week nationwide shutdown and a fall in national property values of 1 per cent.
On a more local level values have risen 4.6 per cent in Rotorua, the best result nationwide, and only dropped 0.3 per cent in Tauranga.
OneRoof and Valocity created the new index to solve the challenges of measuring a housing market that suffered an unprecedented shutdown and faces an uncertain future.
The index sets property values on March 25, the day before the lockdown, as the baseline. Every sale since that date has been analysed and tracked, allowing subtle changes in the market to be measured.
The index shows the impact of the lockdown and the extent of the bounceback.
OneRoof editor Owen Vaughan said while the median house value in Rotorua was $495,000, up 12.5 per cent on the previous year, a lot of the rise in value had happened pre-Covid-19. The index allowed OneRoof to track the changes in the market post-lockdown.
"We've charted the market from January 2018 to the start of June. We can see property values have risen steadily, dropped during lockdown, then gone back up again. Values have slid but not crashed."
He said while property values were stronger than expected in Rotorua, the caveat was there had not been many sales which means the index may not provide an accurate picture.
"Even with the caveat, it's a still bright outlook for Rotorua. It was one of the areas pinpointed as in for a tough time as a major tourist destination.
"It was one of those areas identified as vulnerable. The reason why it may be doing well could be down to fact it's still affordable with properties sub-$500,000."
First National principal and Rotorua REINZ spokeswoman Ann Crossley said many sectors of the Rotorua market were still "humming along" but the industry was still grappling with a major housing shortage.
She said demand remained strong as people who were not impacted by job losses were still active in the market. Investor interest was particularly strong at the moment.
"We are getting a lot of multi-offers and the value is holding strong."
Crossley was not surprised that the market had bounced back, but was "relieved" as the landscape was changing every day and they were yet to feel the impact of the wage subsidy and mortgage holiday coming to an end.
"The impact of Covid-19 is far from over."
The housing shortage could well be exacerbated as more New Zealanders return to the country as it was viewed as a "safe place", she said.
She said it was common for the market to take a small hit in an election year as people often chose to wait and see the results before making big property decisions.
Professionals McDowell Real Estate co-owner Steve Lovegrove said it was no surprise that Rotorua had bounced back strongly post-Covid as the regions were becoming even more attractive.
He said there was a clear "outflow" of people from the big cities, which was creating an "inflow" of people moving into Rotorua.
Buyer demand was getting higher meaning values had not seen a drop, he said.
"There is no reason to leave Rotorua right now ... but we just need more stock from the top end."
He said there could possibly be more stock turnover in the coming months as people choose to sell up as circumstances change, but that was not showing up at this stage.
Valocity valuation director James Wilson said Rotorua was one of the best-performing markets with low sales volumes and that could be a reflection of the property market before Covid-19.
"We came into lockdown relatively hot and it's carried on that strong growth," he said.
"It doesn't mean we're going to continue to get capital growth but are we going to fall off the cliff? It's looking more unlikely."
Wilson said his advice for buyers was to take their time, think long term and buy for the right reason.
REINZ chief executive Bindi Norwell said despite initial predictions prices could fall up to 16 per cent they had been holding.
"May's [REINZ] data showed that three regions across the country, Waikato, Taranaki and Tasman, all had record median high prices and an additional seven regions saw median prices increase since April, showing there are some signs of strength in the market.
"Currently, we're seeing a lot of activity in the market, but what we need now is more listings to meet the level of demand."
Norwell said whether prices would be sustained long term could only be known once more data was released.
"It will take a number of months before we have a full understanding."