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Although the Hawke’s Bay real estate market is showing signs of a quick recovery, any idea of bargain basement deals or returning to pre-Covid glories are little more than sensationalism, says Simon Tremain, managing director of Tremains Real Estate.
While the market “looked unstoppable prior to the pandemic hitting the world stage”and is “very busy” again, Tremain doubts things will get back to where they were, given the impact of Covid-19 on our economy. “My pick is for a quieter period over the next two years.”
Although Tremains are putting deals together on a daily basis, he says it’ll take a while for the volumes to climb back, and while people will always buy property “it is seldom ever sold at a discount”.
Likewise, he isn’t convinced the crisis will drive house or commercial prices down providing bargains for Auckland and Wellington buyers. “Have you ever seen property move dramatically backwards in our lifetime?”
The May OneRoof property report confirms Hastings is leading the nation in terms of real estate movement with a 35.8% increase in sales over March 2019, significantly ahead of ahead of other high performers Whanganui (28.8%) and Invercargill (26.4%).
Tremain agrees the market is already in recovery with buyer appointments leading to offers and contracts, but growth is unlikely to be as dramatic before the March lockdown.
Getting back to pre-Covid volumes will depend on “market confidence, unemployment levels and incomes”, with key drivers for recovery being “the lowest interest rates in history and the impact of supply starting to outstrip demand”.
He says there will still be good demand for blue chip commercial property with a reasonable yield. While the market may turn and favour buyers for a time, he urges people not to “sit around waiting for the bargains, as you will miss out”.
There’s likely to be an increase in mortgagee sales from those who are unable to service loans during the crisis, but the government is “already working to ensure New Zealanders are given every opportunity to find new employment and new income sources in an attempt to pay the mortgage”.
Tremain says it impossible to put numbers on how many sales were lost or put on hold. Tremain’s turnover was down 77% in April, but the company had budgeted for it to be worse.
“The fact we moved out of Level 4 within specified timeframes was key to giving the market some life,” he says.
His mantra is to maintain confidence, as the way we behave affects others, something that was imperative as he and his team “lived on Zoom meetings” from Day 1 of lockdown.
“The ability to pop in and out of meetings and breakout rooms, run sales meetings, company webinars and have verifiable training has been essential to keeping our team communicating.”
He says Hawke’s Bay is still an affordable region with people in many industries showing they can work from home. “People would love to live here because of the excellent infrastructure, airport, weather, beaches, food, wine and lifestyle choices, if they could source suitable employment.”