The housing market is poised to address the recent shutdown of Covid-19 more than it has been in the country 18 months ago.
Then, the sale of the house was halted and closed, and for five consecutive weeks with only a handful of items changed hands.
The first closure was like promoting the real estate business, and other services such as banks and lawyers, have to adapt to new ways of doing business using information technology.
Nowadays, it is possible to make a list of goods, watch, do business, negotiate and finalize sales contracts without face-to-face contact.
It ensures that the work continues, even slowly, throughout the closure.
Alternatively, the remaining major roadblocks are close to vendors who are struggling to set up their site to register and vendors and buyers are unable to transfer deadlines.
If the closure continues the Government should take into account the number of borrowers / landlords who are participating in the transformation of the new rents.
In the big cities, there is always a large number of mortgages, and there will be a number of lenders and homeowners who want to establish their rights and responsibilities based on being locked up from following unplanned plans and events.
However, as always when it comes to housing, the big question is’ how does this affect the price at which property is sold.
The Reserve Bank, Treasury, financial experts and commentators have all struggled to answer this question for more than a decade, and many have admitted that they have always made mistakes.
This is not a challenge for those who should, or love, prophesy. I just see that the changes that cause house prices to rise are so complex that nothing is offered.
During the initial closing period sales prices in Auckland fell by 4.5% and the median price dropped by 1.2% *. As soon as the closing is raised the average selling price will return to before it closed when the average price took several months to return.
To enter this Lockdown, prices between July and mid-trade were very high and although there were strong indications that prices were rising and starting to cool, prices were rising.
There was also speculation that the OCR rate was about to increase between 0.25% and 0.5%, and there were concerns about how this would affect interest rates.
As a result, the closure came before the Monetary Policy Statement (MPR) was issued, and any OCR increase was suspended.
Prior to the release of the MPR, Reserve Bank Governor Adrian Orr was quoted in the media as “estimating” that house prices should begin to decline by the end of the year, and that in the next two years it could decline. about 5%.
A major factor observed by the Reserve Bank is that rising housing prices and rising prices for new homes could increase the demand for housing – the need for declining numbers as the population declines due to declining relocation.
Among the issues he cited were strict mortgage laws, changes in tax rates and rising interest rates.
The governor emphasized that the letter was not a signal of a formal antitrust inquiry into the allegations, but said that “the prices of housing may be the same as before, and 5 or 8 years of financial growth justifies them, or we see improvements”.
As we have seen, over the past 60 years, the average real estate price in Auckland * has more than once dropped by 5% (between 1962 and 1963 it dropped by 8.5%). Within three years the median price of 1965 was 12.1% higher than in 1962.
Depreciation can occur, but if it has already happened, recovery is faster.
* Barfoot & Thompson products
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