Friday property news update
BOE optimism, gold heads south and Asian property leads the recovery
3 minutes to read
A materially brighter outlook?
Bank of England Chief Economist Andy Haldane’s said in his key note speech that the economic outlook for 2021 was “materially brighter” than he had expected just a few weeks ago, following a fortnight of positive news about the efficacy of vaccines. He said third-quarter growth had surpassed expectations, though the immediate outlook for the fourth quarter was darkened by the four-week lockdown.
Indeed, Britain is on course for a double dip recession, according to a new Reuters poll of economists. Following a 19.8% contraction in the second quarter, respondents expect the economy to shrink 11.0% this year and expand 5.3% in 2021.
Meanwhile, consumer confidence hit a six month low in November and more than a third of restaurants and hotels fear that they might have to shut permanently within the next three months, according to the ONS.
Optimism weighs on gold
Many of these themes are being replicated elsewhere, particularly across Europe, which accounted for 39% of the confirmed daily Covid-19 cases in the most recent seven day period.
The data suggests European consumers have already spent much of the savings they built up during the initial round of lockdowns and will likely reduce spending and increase savings, writes Flora Harley. However, high-frequency data indicates the second wave of infections has not hit Europe’s economy as hard as the first wave.
Investors are now starting to pare safe haven bets on renewed optimism about the global recovery. Gold has fallen below $1,900 a troy ounce after hitting over $2,000 in August and analysts predict the dollar could fall 20% if a widely available coronavirus jab leads to an economic rebound.
Asia-Pacific leads prime real estate markets
With much of Europe in a second lockdown and cases rising in North America, Asia Pacific is emerging as a key bright spot in global prime real estate. Cities in the region account for five of the top ten rankings in our latest Prime Global Cities Index.
Hong Kong and Singapore are due to open a travel corridor on 22 November, the first indication that borders and travel restrictions are starting to ease across the region.
Meanwhile, residential sales in Mumbai hit an eight-year high after the Government of Maharashtra announced a reduction of the city’s 5% stamp duty rate. The announcement saw residential sales reach almost 8,000 in October, a rise of 36% year-on-year.
More on Brexit, vaccines
Domestic headlines on Brexit and vaccines will continue to dominate the news agenda during the coming fortnight.
Scientists developing a Covid vaccine at Oxford University said yesterday that their jab had produced a “robust” immune response in people over the age of 70 and EU officials said the Moderna and Pfizer vaccines could receive conditional marketing authorisation in the second half of next month.
Meanwhile, Brexit talks are to switch to a virtual format after a member of the EU negotiating team became infected with the virus. Respondents to the poll mentioned at the beginning of this update still believe a deal is the most likely outcome, but put the chances of a no deal at about 40%.
In other news...
Care home occupancy stabilised in Q3, following an 8.5% drop in Q2.
Plus, US unemployment claims rise, Seoul converts hotels into studios to ease housing crunch, why Covid-19 vaccines face a new obstacle course, and finally, the luxury sector is set to contract by a fifth in 2020.