Global residential markets show signs of renewed activity
As lockdowns ease across the globe, businesses are reopening and market activity across almost all sectors is resuming. Real estate is no exception: the loosening of lockdown means that listings, viewings and sales can once again take place.
Savills Research has carried out a sentiment survey of the Savills global residential network to assess how Covid-19 is changing the residential property market as restrictions lift and what the future trends might be.
In a promising result for property markets globally, 78 per cent of respondents said that most or almost all of the buyers in their regions are still looking for a new property.
Similarly, the majority of vendors across over 90 per cent of markets surveyed are still planning to sell their properties. This sustained level of interest from both buyers and vendors bodes well for the resumption of transactions as restrictions continue to ease.
There is a disconnect when it comes to price expectations, however. Seventy eight per cent of respondents stated that buyers were expecting to see lower prices than before lockdown. Conversely, 78 per cent of vendors are anticipating pricing to remain the same.
Resort and second home locations such as the Algarve and the French Riviera report both buyers and vendors expect prices to remain the same. however respondents in urban markets, such as Bangkok, Sydney and Prague report expectations of lower pricings from both buyers and sellers.
Despite the pandemic and prospect of a global recession, 33 per cent of respondents report the same number of new buyers post-lockdown compared with this time last year. Some markets are even beginning to see more activity with 10 per cent of respondents reporting that since lockdowns lifted, there are more new applicants than the same time last year, particularly in second home and resort locations.
The general sentiment across survey respondents is that things are looking positive, but the market hasn’t quite recovered yet. Respondents in China, which has been out of lockdown for the longest, stated that the market took two to three months to recover, though activity has largely returned to normal. Many survey respondents reported that it was simply too early in the recovery to make any comparisons, either because flights for international buyers are still not allowed, or because potential buyers are still waiting to view properties in person.
As activity resumes in the property markets globally, changes to the way people lived and worked during lockdown are already affecting buyer preferences. Respondents in 33 per cent of markets are reporting increased interest from buyers looking to upsize their main residence. Urban centres such as Sydney, Rome and Monaco reported increased interest in upsizing particularly as residents likely endured lockdown periods in smaller spaces.
For second homes, the overwhelming trend is that there has been little change in level of interest in 2020 from 2019. The number of buyers looking for investment properties could dip in 2020, however, as 30 per cent of markets are reporting a decrease in buyers looking for investment properties compared to last year.
Optimism is returning to the market as restrictions ease and commercial activity restarts. The new normal will present many opportunities for both buyers and vendors. Key to growth will be increased confidence from market participants and the resumption of travel after lockdowns are lifted and borders are reopened. As restrictions have eased, survey respondents are reporting increased demand, particularly from domestic buyers, and are anticipating stronger activity levels going forwards.
Respondents anticipate slightly increased stock levels, particularly in the near term as lockdowns are lifted and business activity returns to a more normal level. Resort markets in particular are reporting the potential for increased supply as international travel remains more difficult and buyers prioritise upsizing their primary residence in the near term.
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