The Mixed emotions and thoughts that we experience with the introduction of Level 1 will probably be here for a while. To consider that we have no real idea what the state of the economy will be in six to twelve months and how it will affect us personally and in business is a big uncertainty.
At the time of writing, the Southland property market has proven to have bounced back with reasonable activity post lock down. We have found that purchasers have been fairly confident in their purchasing and were not as unsure as many were expecting. This is no doubt due to both pent up demand, as well as generous borrowing interest rates. We hope to see a continuing of this pattern however are realistic that the economic uncertainty and unemployment will influence this as a whole.
We are already seeing an increase of interest from other regions for those who have either lost jobs or are looking for more affordable markets such as Southland. The REINZ Q1 2020 Capital Gains & Rental Yields Report has shown that Southland is a strong leader showing capital gains in Southland increased by 22.0% for the three months ending March when compared to the same time last year with median prices going from $287,000 to $350,150. As well as the 4.8% year-on-year yield growth being a huge draw card for investors when comparing with the rest of the country.
I stand by our statement in our previous blog that Southlanders are tough and will come through it, however we have now seen sectors of our community have been hit hard with Covid related redundancies and our genuine thoughts are with these businesses that have had to make tough decisions as well as those people who have found themselves out of work – through no fault of their own. The cold reality is awful and as we all go about our business it is imperative that we keep this in mind and ensure our buying decisions are influenced by buying local and New Zealand made as much as possible.
If you’re feeling concerned about buying at what might be viewed as the ‘top of the market’ we recommend that you bear in mind, any minor fluctuations in the market will be absorbed over time. Property, whether an investment or your dream home will usually be viewed as a long term investment. Much like an investment portfolio – it’s about long term gains not the perceived value in two months time.
Always seek professional advice before buying a property.
Written by Mike McCurdy, Managing Director - Todd & Co Realty.