The Star: March 26, 2020
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<strong>The</strong> <strong>Star</strong> Thursday <strong>March</strong> <strong>26</strong> <strong>2020</strong><br />
<br />
4<br />
NEWS<br />
<strong>The</strong> real estate industry<br />
is confident the property<br />
market will weather the<br />
Covid-19 storm, after it has<br />
ravaged markets overseas.<br />
Louis Day reports<br />
BEFORE COVID-19 ran<br />
rampant across Italy, the Wall<br />
Street Journal published an<br />
article titled “Why Is Milan’s<br />
Real-Estate Market So in Fashion<br />
Right Now?”<br />
At this point, only one case of<br />
Covid-19 had been confirmed<br />
in Italy. Since then, more than<br />
69,000 cases have been confirmed<br />
and Italian real estate research<br />
institute Scenari Immobiliari has<br />
reported a 12 per cent decrease<br />
in house sales<br />
for the first two<br />
months of this<br />
year.<br />
Already in<br />
Canterbury,<br />
more than 800<br />
house sales have<br />
Justin Haley<br />
been derailed<br />
by the Covid-19<br />
lockdown. In most deals, the<br />
seller of one house is the buyer<br />
of another, and that vendor is<br />
looking to buy another, so a lastminute<br />
failure of just one sale can<br />
trigger a chain reaction which<br />
affects large numbers of people.<br />
South Korea, which now has<br />
more than 9000 confirmed cases<br />
of the virus, has seen its property<br />
market ravished.<br />
Local business outlet Chosun-<br />
Biz reported the country’s apartment<br />
market saw an average of<br />
just 458 sales per day nationwide<br />
in the first nine days of <strong>March</strong>,<br />
compared to 2272 per day in<br />
December. That is an 80 per cent<br />
decline in sales.<br />
<strong>The</strong> decline has been even<br />
starker in the densely populated<br />
Latest Canterbury news at starnews.co.nz<br />
capital of Seoul, where daily sales<br />
volumes fell by 90 per cent from<br />
309 sales per day to just 31.<br />
“Business is frozen as more<br />
people are postponing moving<br />
plans because of the coronavirus,<br />
or are hesitant to show their<br />
homes to strangers out of fear of<br />
contagion,” a real estate broker in<br />
Seoul told ChosunBiz.<br />
In spite of the doom and gloom<br />
overseas, Bayleys residential<br />
and projects divisional manager<br />
Justin Haley remained optimistic<br />
the property landscape would<br />
return to normality after the<br />
lockdown.<br />
“Through adversity, there is<br />
always opportunity,” he said.<br />
“In times of uncertainty you<br />
definitely find people gravitate<br />
towards tangible assets, we have<br />
seen that not only through the<br />
GFC but also after the earthquakes<br />
sequence.”<br />
Mike Pero real estate agent<br />
Hayden Jones shared Mr Haley’s<br />
optimism.<br />
“I guess the lockdown is a real<br />
chance for people to have a bit of<br />
reflection and hopefully they will<br />
come out of it ready to purchase,”<br />
he said.<br />
CoreLogic senior research<br />
analyst Kelvin Davidson said<br />
New Zealand’s property market<br />
has historically been resilient to<br />
most “shocks.”<br />
“<strong>The</strong>re’s only been three<br />
material falls in property values<br />
in the past 30-35 years. <strong>The</strong>se<br />
occurred in the early 1990s with<br />
a five per cent fall, late 1990s<br />
with a three per cent fall, and late<br />
2000s with a ten per cent fall,” he<br />
said.<br />
“From the troughs in the first<br />
two episodes, it took around one<br />
year for the previous falls to be<br />
fully reversed, but the rebound<br />
from the global financial crisisrelated<br />
downturn took more than<br />
three years.<br />
“<strong>The</strong> market also shrugged off<br />
the SARS epidemic, for example,<br />
without any falls in prices.”<br />
Statistics from the Real Estate<br />
Institute of New Zealand show<br />
the national median house<br />
price increased by 14.3 per cent<br />
last month, a new record of<br />
$640,000, up from $560,000 in<br />
February 2019.<br />
Thursday 16th of April<br />
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