Global City Residential Watch
The pandemic has not only hit global cities at different stages over the last three months - China’s first case was 27 December whilst Denmark saw its first case on 29 February - but it has also hit cities at different stages of their property market cycles.
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Alongside my colleague Flora Harley’s Global City Economic Watch we will be providing a weekly look at the latest residential market indicators from around the world, from sales volumes to prices, rents and residential completion rates. The aim is to understand what impact Covid-19 has had on demand and supply but also monitor how this compares from country-to-country and city-to-city.
Unlike economic indicators where real time data can now often be downloaded at the touch of a button – from flight traffic to congestion levels and from demographic mobility to restaurant bookings - property markets still operate with a significant time lag. In the current climate land registries and notaries, who usually collate and compile the sales data, do not fall under ‘essential commercial activities’ in most countries and as a result have largely closed.
Perhaps surprisingly, Asian markets offer the timeliest source of property sales data as we’ve covered in recent blogs, whilst European markets – now, the focus of greater scrutiny – often publish official sales data with a two or three-month time lag. This suggests it may be June before we can accurately gauge the scale of the downturn across Europe over the last month.
Of the global datasets that have been released, the results are perhaps counterintuitive. The two cities where data for March is available, Hong and Vancouver, both saw sales strengthen in March.
However, both cities saw a low level of cases reported in February with numbers rising from mid-March onwards.
Sales in Hong Kong increased 8.3% month-on-month in March according to the Land Registry of Hong Kong but sit 26% below the level recorded a year earlier in March 2019.
According to the Real Estate Board of Greater Vancouver (REBGV) some 2,524 properties changed hands in March 2020, up 46% year-on-year and a 17% increase from the 2,150 homes sold in February 2020. However, as the month progressed activity declined as concerns about the COVID-19 outbreak intensified.
Aside from official sales and price metrics, our own proprietary datasets, in particular our webstats which monitor online property viewings across all Knight Frank’s websites, shows an uptick in activity in the last fortnight, particularly across France, Spain and Italy. The view from our agents who continue to receive enquiries is that some are using this time to undertake due diligence, to whittle down their prospective property lists and put their time in lockdown to good use.
We will continue to monitor these and other residential market indicators on a frequent basis. These will offer a reliable indication as to how quickly real estate markets start to normalise once the threat of Covid-19 is under control.
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