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Reasons to be positive about the housing market:
A baby boom
"Come December and January there is likely to be a baby boom as people engage in relations whilst in lockdown. This will necessitate some upgrading of house size for some families."
Low mortgage rates
"Mortgage rates were at record lows heading into this recession, they have gone lower, and they probably will not go up to any noticeable degree for three years."
Higher long-term net migration
"We know that events such as this which turn people’s worlds upside down can have profound impacts on long-term lifestyle choices. There is a strong possibility that many of the one million Kiwis offshore plus their partners and children will choose to live back here."
Working from home
"Many more people will be doing this after lockdown than before, on a permanent basis. The extra time spent at home may lead some to shift further from the city centre for more space."
Apartment living
"After being confined in an apartment for 4-8 weeks, some people may want to swap for a house."
Less outbound travel
"Just as fewer people long-term will visit here, so too will fewer of us holiday overseas..."
Young people saving
"Much attention has been made to reduced deposits for those young people who were going to use their KiwiSaver funds but who were in the wrong type of fund. But now they are realising how quickly a deposit can be built without spending $100 a week on coffee."
Construction slump
"No new houses are being worked on for 1-2 months. This means slower supply growth."
Lower household debt than previous crises
"Household debt rose just 40% in the past five years versus 80% in the five years leading into the GFC, and 115% leading into the 1997/98 Asian Crisis."
This recession is temporary
"We know some sectors have essentially gone, and the downturn this Autumn – Winter will be deep. But we can reasonably believe a vaccine will appear at worst 16 months from now if the scientists are
correct."
Stimulus measures
"There is simply nothing else in history which compares with the fiscal and monetary guns being brought to bear."
Mortgage Holidays
"Anyone under stress can put their principal and/or interest payments on hold for up to six months. After that many will find their debt is still too burdensome and politely forced sales are likely to rise."
Working visas
"As most of the 200,000 people here on temporary work visas leave in the coming year or so, and jobs will have to be offered to Kiwis."
Labour shortages
"Eventually, the shortages of labour in many sectors will attract Kiwis and help soak up some of the unemployed."
Preference for property
"Just as baby-boomers avoided shares following the 1987 crash and decimation of their wealth, so too will a new generation perhaps look more favourably at property as a long-term investment."
Property shortage
"This main centre shortage means not just a physical shortage of property, but a shortage of listings also, Given the low interest rates and mortgage holiday it is extremely unlikely that listings will massively surge when our economy opens up again."
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