I saw an excellent chart on twitter last week and it was beautiful in its simplicity. It simply charted the number of times the word ‘unprecedented’ had been used online each day. 

Needless to say, it’s taken off like a sky rocket. It’s the word of the hour, the word of the day, the word of the week and the word of the month. And you know what? It’ll be the word of the year as well. 

And in these times, we are all searching for truth and rely heavily on data to deliver these truths as we look to the past to provide lessons for our future, unfortunately it’s becoming more and more difficult - why? 

Enter that word again – ‘unprecedented’. When else did the country go into complete lock down? When else did the Official Cash Rate reach 0.25%? When else did we see such wide-reaching and deep support from the Government in such a short space of time? I’ll tell you when. Never.

Sure, we can look back at the GFC, or any of the other prior downturns to track market performance, both through the drop and subsequent recovery, but the truth is these previous downturns were very different from this current health crisis that has been the catalyst for an economic crisis.

So we need to look at what is capturing the ‘now’. What did behaviors look like heading into the COVID-19 lockdown? What are people saying? What are people expecting to happen?

At CoreLogic our unique position as a data and analytics business allows us to capture, monitor and analyse a lot of data, particularly around industry sentiment. We pride ourselves on connecting the property ecosystem and that gives us access to daily flows of industry related data and relationships with a broad range of interesting people.

We continue to field a growing number of enquiries from individuals and businesses across the property sector where the market is heading in the short term, but also how things might shape up when this current phase of disruption passes and a recovery begins. The interest is high. And here’s what the data is telling us:

Perhaps most interestingly, there was a spike in new listings (outside Auckland) up to the week ending 15 March - before anyone knew about the inability to transact property for four weeks. This could be a sign that people were already worried about their jobs/income/security.  As confidence fell, a larger than normal number of home owners were looking to offload and deleverage. 

The question now then, given home owners essentially can’t sell for a while, is how well can they ’wait out’ the lockdown (Government/Bank support will be key for this) – and once it’s over, how desperate will they be to sell? Because that will influence the eventual price they accept. 

At least there’ll be some extra help provided via the mortgage repayment holiday option, and the business finance support package – both initiatives should help to mitigate forced property sales. 

As we got closer to the lockdown though, we started to see the impact at the frontline. The number of Comparative Market Analysis (CMA) reports run by Real Estate Agents using our products (Property Guru and RPNZ) were already on the drop (-17% week-on-week) before Prime Minister Jacinda Ardern announced the four-tiered system on Saturday 21 March. Come Monday 23 March, when we were told about the plans to move to Level 4, via 48 hours in Level 3, and CMAs were down -30.5% week-on-week. And by the time we’d entered lockdown we finished 48.1% down (week-on-week change in 7 day rolling count). Uncertainty will have played a huge part in this.

Change in CMAs

One other key frontline dataset was a survey we ran of almost 200 professionals using Property Guru in the first three days last week. The large majority (87%) of these users were Real Estate Agents. When asked about the impact on recent activity, more than half had seen a drop of more than 25%.

Impact for agents

So it’s clear the impact of coronavirus on property market activity, even before the full lockdown was announced, was significant. We now go into an effective hiatus so all eyes turn to ‘the other side’.

Perhaps this is an insight that could come from recently active buyers. This is because those that bought most recently, are likely to be the ones most affected by any drop in values, impacting their equity situation. 

Our Buyer Classification provides that insight and as our economist Kelvin Davidson pointed out last week, multiple property owners, particularly those with only one other property have been a very active group recently. So we may well see a bunch of investor owned properties re-listed on the market following the lock down.

The other thing to watch for is the movement of short-term rentals moving to long-term rentals. AirDNA.co, which tracks properties listed on AirBnB and the like, has seen a drop of roughly 20% in our largest markets, compared to the end of last year. Auckland is down 20%, Wellington and Christchurch are down 17% and Queenstown is down 18%. Usually listings increase in Q1.

In terms of what’s coming up, all eyes will turn to the release of the respective house price indices.

March’s CoreLogic QV House Price Index will be out on Wednesday 1 April and given that this edition will pre-date most of the shutdown, we are expecting the results will continue to show a strong outcome through March, demonstrating the housing market entered this crisis with strong foundations. Of course the recent history has become less relevant, however the March results will provide a benchmark to compare to post-lockdown. 

Finally, it now looks like the timing for the launch of our podcast couldn’t have been better as it’s a great channel to deliver frequent insights of what we’re seeing and hearing in the market as it’s happening. Subscribe in any player you use and get in touch with your questions and experiences. We’re all in this together and sharing our stories and insights will help us all.