COVID-19 could bring good news for first-home buyers

PHOTO: Property commentator Ashley Church, former head of the Property Institute of New Zealand

First-home buyers may be among the few groups to benefit from the economic damage caused by the COVID-19 pandemic.

House prices are set to drop in the wake of the coronavirus outbreak, giving those hoping to get a foot on the property ladder a chance to get into the market.

Property commentator Ashley Church, former head of the Property Institute of New Zealand, says lower house prices, combined with less competition from foreign investors and a proposed change to loan-to-value restrictions will give many first-home buyers their first real chance to get ahead.

“There’s some good stuff that can come out of this,” Church told The AM Show on Wednesday.

Millie wants design advice

He said though he believes banks may be a “little bit cautious” for a couple of months as they assess the impact of the pandemic on property values, they will start to lend again eventually.

“They’re not going to want to rush into the market lending more money if they think that property values are going to decline.

“Once they recognise that that’s not going to happen, I think there’ll be an appetite to actually start lending again, and that will be right across the market, but it will include first-home buyers who, for the first time in a long time in places like Auckland, are actually going to have an opportunity to get into the market.”

Before the country went into lockdown in March, house prices had continued to climb to dizzying heights.

According to the Real Estate Institute of New Zealand (REINZ), median house prices across the country increased by 14.3 percent in February to a new record median price of $640,000 – up from $560,000 in February 2019.

adsense