As we gradually emerge from lockdown some of our clients and purchasers are asking us how will the coronavirus influence property prices?
This is something that is hard to answer with any absolute accuracy at this early stage and will only be judged when we are able to look back.
Much will depend on the shape of the bounce back. If it is V-shaped as are most predictions, we can be hopeful for only short term and minor turbulence. However, if there is a long tail then perhaps prices in specific sectors could be affected but we think unlikely.
First and foremost, many people are buying as a place to live rather than an investment.
Over the ownership period prices and demand can fluctuate but over the medium-term history shows us property prices always increase almost more than anything else and any adjustment to pricing will be temporary. We are likely to see less property available, perhaps for a very small time some buyers will watch the market, but this will be balanced by less property for sale.
Any market being always led by supply and demand one will likely balance out the other.
While the lockdown has thwarted many plans to move, some people have found that post-virus working life promises the chance of more freedom.
Many people in future could now work from home – the need to commute could be over – a move to a rural or coastal location or to be closer to their families will be possible and even preferable. Many of these buyers will also be looking for properties with work-from-home space; others will want multi-generation family options.
So we see a great deal of cancelling-out between sectors; which brings us back to price. In this nothing has changed. The first thing an estate agent learns is that whatever the price quoted on a property, it will in the end find its correct level in the market. A property is worth what someone will pay for it. An invisible hand called the market is not affecting property prices; people are affecting them.
We have sold properties on Christmas Eve. We have sold properties at the very depths of the financial recession and in all parts of several boom-and-bust cycles. Even now through the Covid19 pandemic we have seen sales through to completion.
No matter what the trend is across the country, throughout this pandemic our area has proved to be resilient and popular. Coronavirus has not altered that.
So what about prices? In the property sector realism will move us out of this crisis. With a realistic price, a pragmatic attitude to negotiation and a sensible buyer coronavirus will be unable to infect our market.
Realism is our vaccine.