It’s obviously been an unprecedented year for the economy and property market so far in 2020, but it’s at least been
reassuring that the number of appraisals generated by real estate agents, for-sale and for-rent listings, valuations ordered by banks, mortgage lending
flows, and agreed sales activity have all rebounded since we left alert level four lockdown in late April.
What’s more, we entered lockdown with a low supply of total listings available on the market, so with that set alongside the release of pent-up demand
for property (which couldn’t be acted upon during April), prices have held up relatively well over the past few months. Of course, ultra-low mortgage
rates have also been a key support here, along with the Government’s wage subsidies and the option for borrowers to go interest-only or take a
payment deferral.
But looking ahead, how might the rest of 2020 pan out? Unfortunately, the ‘good times’ that have re-emerged for property since April are more likely
to fade out in the second half of the year than to roll on. After all, although we’ve been wary of the doom-mongers out there, at the same time
we can’t ignore the fact that we’re in a recession and the unemployment rate has further to rise. These factors will restrain the property market
in the coming months.
In addition, as we hit spring we’ll see the usual seasonal rise for listings, which will be a test for the true strength of demand – if it falters,
then available supply on the market will rise steadily, and reduce the support for prices. At the same time, as wage subsidies and mortgage payment
deferrals come to an end, there’ll be further tests for the property market...
