If we had to describe 2020 in just one word, ‘unprecedented’ seems to be the go-to term for these times. No doubt, it has been a year like no other in recent history.
But looking back at the past few months, there have been silver linings in the storyline of 2020, including the unexpected strength of the New Zealand property market. With only a few days left till the end of the year, here are some key takeaways for the real estate sector.
The housing market has proved resilient
As we’ve seen recently, the property market has emerged as an economic bright spot amid the turmoil. Despite economists’ early predictions, property prices have consistently increased in most regions throughout the year.
Of course, a lot is on the cards to happen in the next few months, including the likely reintroduction of Reserve Bank-enforced LVR restrictions. But given the low supply, the predicted wave of returning Kiwis looking for properties to buy, and lower-than-ever interest rates underpinning housing demand, it looks unlikely that current price rises will slow anytime soon.
Vendors building equity in their homes
Many New Zealand homeowners are getting a financial boost from housing appreciation, and according to recent surveys, many have been considering getting even more equity in their homes through renovations.
A survey conducted earlier this year by independent economist Tony Alexander revealed that 35.2 per cent of respondents were planning to spend their money on a home renovation following the easing of lockdown restrictions. “Perhaps as a result of spending five weeks looking at their walls, [respondents] have decided the time is right to spruce up their house, change the wallpaper, knock out a wall, or create a home office,” Alexander said.
Whether or not homeowners are renovating to sell, this appetite for renovation is welcome news for buyers, investors and the real estate sector at large, all of whom can always benefit from a higher-quality housing stock. The key thing is to plan renovations according to buyers’ post-Covid needs, something we talked about in our recent blog post How Covid-19 is affecting housing ‘needs’ and ‘wants’.
The value of technology
With Covid-19 restrictions limiting open homes and auctions for a significant part of the year, real estate agents have been able to use new technology to showcase and enhance their listings. Virtual viewings, drone footage and online auctions are likely to remain helpful tools in the ‘new normal’.
For more on this, check out our articles Friendly open homes in the ‘social distancing’ age, How to make your virtual tour more effective, and Key steps agents and vendors can take in these uncertain times.
Potential for growth in the regions
Another interesting takeaway from 2020 is the potential for regional property markets to grow at a faster pace in the coming future. Among the key factors underlying this trend are the rise of remote working, affordability requirements for first-home buyers, and possibly returning Kiwis looking to go back into regional New Zealand.
Our homes, our castles
Lastly, 2020 has been the year our homes have become our whole world. During lockdown, people have been spending more time than ever between those four walls, noticing what they liked and what they didn’t like about their properties, what they needed most and what could improve their quality of life – like a functional home office design, or a good-size backyard for kids to play.
More than anything else, many have realised that a home is more than just an asset. It’s a lifestyle, a place of comfort and security where memories are created. This sentiment is likely to persist in the year to come, adding to Kiwis’ long-standing love affair with property.
Like to maximise your vendor’s property opportunities?
At Lifestyle Finance, we specialise in helping New Zealand real estate agents and their vendors maximise their opportunities in the market, with our ‘Pay Later’ finance options for real estate marketing and renovations. Give our team a call on 0800 100 265 to get the conversation started.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.