Market Update for Wellington
Whilst there have been many predictions as to the direction the residential property market will take in the coming weeks and months, to a large degree, we are sailing into uncharted waters and only time will reveal the full impact that COVID 19 will have on the property market. Many are predicting up to a double-digit reduction in prices across the board and whilst this may occur in some areas, we doubt that Wellington will see a reduction of this magnitude if at all!
What gives Lowe & Co this degree of confidence? Despite the difficulties of trading over the past few weeks while in lockdown, there has been a number of sales transacted and at prices not too dissimilar from the pre-COVID era with multiple offers. Whilst there will be some casualties through reductions of income, redundancies, business failures and a general economic downturn these factors will be countered to some degree by an easing in the Loan to Value Ratios (LVR’S), historically low-interest rates and with the support of a banking system competing to lend to the housing sector.
We should also remember that the demand for housing still exceeds supply locally and nationwide! The Wellington market has historically operated on a more even keel than other parts of New Zealand and there will always be people moving through Wellington for employment and educational reasons. Government support to prop up the economy and to encourage business confidence is assured in the months leading up to the general election later this year. The local Wellington economy is also aided by the presence of the Government, the employment opportunities it provides and also by a lack of reliance on tourism. Astute investment buyers are also likely to be prominent in the market place seeking long term investment opportunities.