With zero cases of Covid-19 in the community, New Zealand is one of the very few countries where life has returned to normal. After two months of lockdown, the country’s property market is demonstrating healthy market dynamics on its road to a true V-shaped recovery — and serves as an interesting comparison to the U.S.
New Listings Supply
New listing volumes at Barfoot & Thompson, Auckland’s largest real estate agency with over 40 percent market share, rebounded quickly after the country emerged from lockdown. New listing volumes in June were higher than normal — an expected effect of pent up supply from the lockdown.
At a national level, new listing volumes (as tracked from a major real estate portal) show a similar trend: an extreme dip during lockdown, followed by a healthy rebound.
Compare this to the U.S., where new listing volumes (as tracked nationally by Redfin) are still depressed and below last year’s numbers.
New listings — supply — are the lifeblood of a healthy property market. A lack of inventory can create liquidity problems in a market recovery.
Comparatively, home sales in the U.S. are still recovering and below last year’s levels. But the overall trend is the same: a temporary dip followed by a recovery. New Zealand appears to have recovered fully, while the U.S. is still catching up.
A strong measure of a healthy market is inventory — the number of active listings in a market — and which direction it is trending. In some U.S. markets, buyer demand is outstripping new listings coming to market, creating a precipitous drop in inventory.