The short answer is that nobody knows. We are in totally new territory, and it’s therefore impossible to predict exactly what will happen. Only time will tell. Some commentators are talking carnage for the real estate market with suggestions of at least a 10 – 20% drop in prices.
While it would be naive to think there will be no change from all this – that the market will pick back up where it left off – for what it’s worth, I don’t see it being anywhere near that bad. Especially here in South Canterbury. Here are 9 reasons why:
1. Flatter Curves
Although these are unprecedented circumstances, it can still be instructive to look at how we (as a region) feared during past market corrections. Traditionally, in both good and tougher times, South Canterbury tends to show flatter curves. Meaning, in the past, we haven’t experienced the same extreme market highs and lows as other areas. We haven’t had massive booms and busts. Instead, we tend to be more ‘steady as she goes’ and a relatively insulated market.
2. Low Covid19 Cases
When it comes to the virus itself, we have also been relatively insulated – being one of the regions with the lowest number of cases.
3. Primary industry.
We are very fortunate to have a strong ‘primary industry’ here in South Canterbury. Fundamentally much of our economy, our port, rural community, dairy factories and the like have and will continue to operate throughout all this.
4. Fewer job and business losses.
I may be wrong and have no data to support this, but suspect our strong primary industry will correlate to our region, as a whole, suffering less job and business losses than some other areas.
5. Supply and Demand
Supply and demand are the primary forces underpinning any market. Low supply and high demand = rising prices. High supply and low demand = falling prices. Those predicting massive drops are assuming there will be lots of people having to sell and very few able (or willing) to purchase. Now sure, there’s no doubt there will be fewer buyers in the market. But I feel there will also be fewer sellers. So although the volume or number of transactions is likely to drop, in regards to supply and demand, there’s a strong argument to say the market could remain relatively balanced. There may be a correction, but I at least do not believe it will massively tip one way or the other.
Life goes on. Regardless of the world circumstances, there will always be Births, Deaths, Marriages, Divorces, Transfers etc. People have to live somewhere, and their personal situations are ever-changing. Meaning there will always be market activity. Yes, as mentioned above, the volumes may be down from more favourable times. However, there will always be people genuinely wanting to transact. Life goes on.
In times like these, we tend to reflect on our lives. Our priorities can change as we focus on the things that are most important to us. Moving forward, I wouldn’t be surprised if many people in the larger centres start focussing on ‘lifestyle’. And personally, when it comes to lifestyle, I think South Canterbury is extremely well-positioned to capitalise on that tend.
We are fortunate to still have a strong sense of community here in South Canterbury. It’s in our D.N.A. For a lot of us, it’s one of the reasons we choose to raise our families and do business here. Already I see the movement of “Support Local” gaining momentum – which is fantastic. Don’t underestimate how important that sense of community will be in the coming months as we rebuild our lives and local economy.
Markets are often driven by confidence (or lack of it). Because of the above, I believe we can get on with our lives with more confidence as a region. So I’d encourage you, don’t wallow in the messages from the doom merchants. If you are personally fortunate enough to be in a position to buy or sell – then do so with confidence.
Therefore here at Restate, we are confident South Canterbury will come through this strongly. We appreciate and want to thank all our clients for your past support and encouragement for offering fairer real estate services. We’re committed to continuing to focus on what we’ve been doing for over five years now:
Helping our clients sell their property for the highest possible price – with the lowest possible fees.