Speaking to a lot of people over the past few weeks of lockdown, the main question I am asked is “How will the property market react to COVID-19?”. The residential property market was in relatively good health in Q1 of 2020 on the back of a reasonable 2019. There were a large number of transactions over Q1 with prices in excess of the asking price being achieved in many instances. This was, in my opinion, due to a surge in consumer confidence following Brexit worries in 2019. The market seemed to be functioning again at a normal level in terms of transactions. While prices were beginning to level off in many parts of the city, there was a healthy stock level available for purchasers. There was much optimism for 2020 but the COVID-19 pandemic has brought life to a shuddering halt.
It’s my opinion that once Government restrictions are lifted, the market will take a number of months to find it’s feet again. Agents are having to readjust their way of operating and embrace new methods (be it virtual viewings, upgrading CRMs, online bidding platforms amongst others). Vendors and buyers are also going to be cautious as the lessons learnt from the 2008 crash are still very fresh in everyone’s minds. However, I believe that the fundamentals of the property market are in a much stronger position than 2008 and a recovery will be made much quicker this time around. The biggest issue will be affordability as purchaser’s ability to borrow will be affected by job losses, reduced wages and reduced working hours. Given the Central Banks’ tight lending regulations (which I have always wholeheartedly agreed with), the amount a purchaser is willing or able to offer will be limited in most cases.
In my opinion, there will be a lot of people looking to upsize towards the end of this year going into 2021. For the first time, most homeowners are spending time in their properties and are working out how they want their homes to work for them. Whether it is an extra room for a home office, a larger garden to accommodate a trampoline or an area with strong community spirit. I’m of the view that the market will suffer a reduction in the coming months as consumer confidence is shaken but as life (hopefully) returns to the new normal, people will look to make the move. This will lead to a lot of activity in Q4 of this year and early 2021. This time over the past few weeks has given people the opportunity to reassess their lives and what really matters to them – for most people it is their families and their homelife. I believe there will be a shift in work/life balance for most people and that will be reflected in their requirements when looking for a home in future.
If you are looking for advice on selling your property please give me a call at any time on 087-9879834.