Now that the country is essentially back at work and some semblance of normality is returning, thoughts are turning to the question of whether it is now a buyer’s market.
A recent survey by economist Tony Alexander showed that just over a quarter of real estate agents feel that, yes, it is currently a buyer’s market, with buyers holding the upper hand.
He says this is unsurprising given that ‘the economy is in recession’. The situation of course may change as the extent of the downturn and recovery expectations become clearer.
His survey showed markedly different results depending on where in the country the responding agents were located. In Central Otago (including Queenstown) 85% of agents say it is currently a buyers’ market, in Auckland this drops to 37% and in Canterbury plummets to just 2%.
Tony reminds us that not everyone is worse off when an economy is in recession. In fact, the vast majority of people are unaffected. ‘In the case of investors, while it is popular to focus on falling rents and increasing costs and regulations, the truth is that investor demand for property is strong and many investors see this recession as an opportunity to make a good purchase,’ he says.
This makes it increasingly likely that long-term focussed investors with good capital bases will be interested in purchasing well-priced properties in the months ahead.
Of course, no one, not even highly experienced economists, can be certain of the details of what’s ahead but the signs are very clear: New Zealand and many other countries are likely in for a prolonged recession. As a result of Covid-19, some industries will take longer than others to recover, particularly tourism, accommodation and travel.
Still, for well-placed investors, the outlook seems positive.