PHOTO: LIZ MCDONALD/STUFF Some investors will worry about tenant availability and ability to pay, and some will think about a potential mismatch between booming new house construction and the new population growth outlook.
OPINION: What might be the impact on housing markets of the Covid-19 coronavirus outbreak and the recession we seem highly likely to have?
The gut answer of many would be that there must surely be a big decline. But it’s not as simple as that, and it pays to remember that all forecasts of sustained house price declines these past three decades have been wrong.
A lot depends on what happens with interest rates, how businesses alter staffing, where migration flows go, and which part of the country we are talking about. Let’s start with the negatives.
Confidence of almost all of us in our personal financial outlook will worsen. We are going to be concerned about the virus entering our communities, along with rapidly falling share prices and evidence of New Zealand firms battening down the hatches.
The pessimism we will feel will discourage some potential property buyers from committing to the largest financing transaction they might ever enter into. As a result, sales and prices will be pressed downward.
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