We’re All In This Together
New Zealand is now in Covid-19 prompted social and economic lockdown and that means the future looks uncertain. But this emergency will end and unity is the best way to get through it.
1 April 2020
This is not the editorial I thought I’d be writing. Once again. At this time last year, my editorial looked at the Christchurch mosque attacks, rather than the then present threat of a capital gains tax. This year, it will focus on the Covid-19 crisis, rather than the
Government’s looming tenancy law reforms. In line with this, the magazine itself looks somewhat different to the one we had initially planned for April. As the Covid-19 outbreak spread and intensified, Government moves to contain it ramped up, and the serious economic impacts became obvious, we realised it had to be addressed.
So, at the last minute, we changed our lead article to cover – as best we could, given the rapidly evolving situation – what Covid-19 might mean for the housing market outlook and for property investors. That article comes with a note of caution though: such is the level of uncertainty around the crisis that aspects of our coverage may have been taken over by new events by the time the magazine is published.
These are strange days indeed. Social distancing, ransacked supermarkets, increasingly deserted streets and now, announced as I write this, a strict, nationwide lockdown. Like most New Zealanders, I haven’t experienced anything like this.
However, I don’t believe these times, extraordinary as they are, and as difficult as they will be for many people, are end times. This crisis will not go on for ever, although the life span of the virus itself is likely to be over before the economic fallout from the efforts to defeat it end.
Without making light of the gravity of it all, the economy has made it through terrible times before. In the last thirty years, we’ve had the GFC in 2008, the Asian Crisis in 1997 and the Stock Market crash of 1987. Yet we’ve managed to come through the other side of all of them, as has our housing market.
That’s why talking to property experts and investors who have been through those major economic downturns before is comforting. We’ve tried to provide some of that type of comfort in this issue.
For example, in our lead article economist Tony Alexander talks about how in the five years after the GFC average house prices rose by 24% nationwide and by 58% in Auckland. And in this month’s housing comment, CoreLogic’s Kelvin Davidson points out that the market’s underlying supply-demand imbalance remains, so the market may be quieter going forward, but it’s unlikely to crash.
What is of more immediate concern to many though are job losses which, unfortunately, are inevitable. They will impact on people’s ability to pay the rent and the mortgage. Both landlords and tenants are worried about this. But it seems to me that the key to navigating these concerns will, ultimately, be compassion, empathy and communication.
There is no doubt these are troubling times. But such times have the potential to bring people together. Remember the community spirit we saw just last year after the Christchurch mosque attacks? That same type of spirit is something we need to embrace in the weeks and months ahead. We are all in this together. Once again, kia kaha New Zealand.