Lockdown Has Small Impact On Auckland Housing Market

The current Covid-19 lockdown Auckland is under had a small dampening effect but no significant impact on the region’s residential property sales in August.

“Sales and prices stood up extremely well during the first two weeks of the lockdown, and a major reason for this is the systems and procedures the industry and other professions such as banking and legal have put in place to enable trading to carry on during lockdowns,” said Peter Thompson, Managing Director of Barfoot & Thompson.

“This enabled vendors and buyers to progress negotiations and contractual proceedings around properties that had been viewed prior to the lockdown commencing.

“By the end of the month this sales pipeline was shrinking, and not surprisingly, sales for the month at 1020 were down significantly on the level of trading we experienced for the previous three months.

“Based on weekly sales data, sales numbers are two thirds of what they might otherwise have been had the lockdown not occurred.

“Regardless, at 1020 they were excellent for a winter month. If you exclude last year, when the market was still recovering from last year’s two-month lockdown, sales were more than 20 percent higher than we normally achieve in August.

“The prices paid for property in August remained rock solid, with the median price increasing by 2.6 percent to $1,130,000, and the average price easing by 0.2 percent to $1,181,596.

“These figures put the year-on-year median price increase at 23.9 percent and the average price increase at 18.7 percent.

“Given the circumstances, new listings for the month at 1258 were excellent although down on where the market was at prior to lockdown.

“It ensured that buyers had a modest level of choice, and at month end we had 2601 properties on our books, 28 lower than at the start of the month and our lowest number in more than four years.

“Two-thirds of the homes we sold in the month were for more than $1 million, and 12 percent of all sales were properties that sold for $2 million or more.

“Given that the Covid -19 lockdown is continuing into September for Auckland, potentially resulting in fewer new listings coming to market, sales numbers may well be down in September. This is likely to see prices holding or increasing, rather than falling.

“Three trends which emerged during the month in both the urban and rural markets were the number of virtual appraisals and viewings taking place through the use of new technology; the number of appointments being made for viewings when we move to a level which allows them to take place; and those looking to get ahead of the market committing to buying ‘sight unseen’ but adding a clause to the sales agreement reserving the right to inspect and approve within 3 or 4 days of lockdown being lifted.

“These developments are assisting the market to move forward while under lockdown.

“Sales in the rural and lifestyle markets throughout the Northland and Auckland regions were largely unaffected, with sales in dollar terms being their highest in 18 months.

“In the Far North interest remained high in beef and dairy listings, while to the north and south of Auckland, buyers were in the market for kiwifruit and avocado farms and potential greenfield developments.”

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