How Will Covid-19 Impact the Auckland Investment Property Market?
The Covid-19 pandemic has affected every aspect of our lives, and the investment property market is no different. While industry professionals remain optimistic that the long-term prospects for Auckland’s property market are bright, the short-term forecast has been muddied by the unprecedented economic strain of the virus and our subsequent efforts to slow its spread.
If you currently have investment properties in your portfolio or have been thinking about investing in property, continue reading for a better idea what to expect as the full scale of the Covid-19 recovery comes into focus.
Fewer people are buying, but are fewer people looking?
The demand for property in Auckland and throughout New Zealand will depend on the speed and stability of the economic recovery that can begin as we ease out of our lockdown. Obviously, this recovery won’t happen overnight. The nature of this recovery is difficult to predict because we have no way of knowing yet what effect the global Coronavirus pandemic, quarantines, and social distancing efforts will have on consumer buying habits.
Right now, rental properties in Auckland will likely be impacted by the absence of international students. Until our international borders are open again, demand may be impacted by a slowdown in immigration, as fewer people are able to pack up and move to New Zealand. People who have just moved will also be highly motivated to sell, as strain on the banks will make bridging finance more difficult to acquire, which also suggests a more buyer-friendly market in the short-term. Good buying opportunities will emerge.
While the severity of New Zealand’s efforts to combat the pandemic certainly strained the economy, the success of those efforts may also hasten its recovery. When it comes to the future of housing prices in New Zealand, however, the only thing that’s certain is that nobody is certain. Forecasting the short-term future of the property market may be impossible, but in the long-term, we don’t see evidence yet of a significant downturn.
Should you change your long-term investment strategy?
The property market may be facing a slowdown, but investment properties remain an attractive opportunity, especially in Auckland. Previous downturns in the NZ property market, like in the early 90s and the 2008 recession, took only around a year to fully reverse.
So, what should you be doing? If you own investment properties already, there’s no reason to panic. Every real estate professional right now is forecasting a property market that will reward patience in the coming years. We have also come off a strong baseline with a shortage of listings for investors and first home buyers.
If you’re in the market for an investment property, however, now may be the best time to act in the foreseeable future. Even a temporary dip of 5-10% in median property prices in Auckland could be a precious window to capitalise on a rare weak point in the Auckland market.
Don’t take on the property market alone
Even the rosy New Zealand property market encounters hardship from time to time, but smart investment requires that you don’t act out of panic. The truth is, property in Auckland and North Shore will remain in high demand, and New Zealand is better positioned for a faster economic recovery than most of the developed world. If you’re building your portfolio, let Lochore’s Real Estate help you through this challenging time. Contact our team of experienced North Shore real estate salespeople today to learn more, we specialise in residential property investment. Our property management services will help you maximise returns.