Prime global cities indices from Knight Frank and Savills reveal how Covid-19 has affected international property markets.
The UK’s Covid-19 lockdown caused a dramatic slump in the number of new instruction and sales agreed, reports Twenty EA, but property exchanges appear to have been more resilient.
“The UK will officially be declared to have entered a recession next month,” says Knight Frank’s Tom Bill. “Recessions are not normally good news for the property market but given how strongly it is performing, this is also unlikely to be any ordinary recession.”
“A full house price crash [is] a distinct possibility,” warns Oxford Economics as it assesses the potential fallout of the Covid-19 pandemic on global markets. But “a much more likely scenario is sideways movement or a modest price correction even in the most overpriced markets.”
Only about half of high street business have re-opened since the Coronavirus lockdown, says The Local Data Company, but 88% of estate agency branches had opened their doors by the start of July.
House prices are likely to fall by 7% as a result of Covid-19, predicts Oxford Economics – but the risks are “heavily skewed” towards much, much bigger price falls of almost 40%…
Rumours are circulating of a Stamp Duty holiday up to £500k.
A survey by Zoopla has revealed that one in seven (14%) of those who were planning to move home before the pandemic hit have cancelled or paused those plans for more than a year.
The British Property Federation has published a “Covid-19 recovery roadmap”, suggesting that Stamp Duty be temporarily cut for institutional build-to-rent investors, and a reduction of VAT on residential property repairs and maintenance.
“Early trading indicators in England are encouraging and we expect a similar bounce back in Wales and Scotland,” says Countrywide’s Board ahead of the Plc’s AGM. New sales instructions last week were running at 94% of 2019 levels and 86% of the average in the first 12 weeks of the year.
“If the sector is seen to be abusing the safety rules, the Government has the right to withdraw its consent to keep the housing market open,” warns Mark Hayward, Chief Executive of the National Association of Estate Agents.
Savills is standing by its pre-pandemic five-year forecasts, despite anticipating a major slump in 2020.