On 23 March 2020, the Government announced restrictions on tenancy terminations from 26 March to 25 June 2020. This temporary restriction came to an end on 26 June and rental property owners can now give notice to terminate tenancies under the normal Residential Tenancies Act 1986 (RTA) provisions. The normal notice period applies.
In March, the Government also announced a freeze on rent increases for an initial six month period ending on 25 September 2020. In September, it will be announced whether this freeze will continue or tenancy laws will return to normal as outlined in the RTA. Tenancy Services has further information for rental property owners and customers.
The economic impact of COVID-19 is starting to show in the housing market with the volume of nationwide sales dropping by a whopping 46.6% year-on-year in May. The median number of days to sell a property also added to this figure, increasing nationally by 19 days from 38 to 57 compared to May 2019. This is the highest days to sell in over 9 years.
While Alert Level 3 restrictions were major contributors to these statistics, ASB senior economist Mark Smith spoke of bleak expectations for the market; “Net immigration is highly unlikely to scale the heights it has done in the last few years, with rising unemployment and rising housing supply hanging heavy over the market. We continue to expect a 5-10% fall in house prices from here, although Government and Reserve Bank action will limit the downside to some extent.”
Infometrics economist Andrew Beattie shared the same sentiment, “We expect mounting job losses and the end of the mortgage holiday scheme in September to put downwards pressure on house prices as the financial stress of households continues to grow."
