Knight Frank daily update Wednesday 29th April
Three weeks to contact tracing, German truckers and London's tall buildings
3 minutes to read
Good morning,
Economic headlines
Stocks in Asia climbed alongside US equity futures as large companies published earnings, and news of the slowing of the virus continued to emerge. Yesterday's gains pushed Asian stocks up 20% from recent lows.
The Federal Reserve is due to publish its latest policy decision today, which may provide further clues as to the scope of the Fed's optimism for the second half of the year. The European Central Bank is set to publish its own outlook tomorrow.
The UK government is around three weeks from releasing the tool it says is essential to easing the current coronavirus lockdown, Health Secretary Matt Hancock said, in a sign current restrictions could remain in place until the second half of May.
European countries that have started easing lockdowns are experiencing a tentative uptick in some forms of economic activity. Electricity use is picking up in Spain and Italy, data on mileage clocked up by German trucks has begun to show a mild uptick, and Google’s mobility to workplaces index — which tracks people’s movements to factories and offices – confirms that German and Spanish workers are slowly getting back to work.
Meanwhile, Google’s parent company Alphabet, which saw a sharp slowdown in revenue growth as advertisers cut back amid the crisis, said users of search are beginning to return to normal behaviour.
According to Johns Hopkins, Spain, which is aiming to remove most restrictions on daily life in the next eight weeks, continued its decline in daily incidence yesterday. New cases in Italy have now been in decline for five weeks.
In the UK, last week was the second consecutive week of declining daily incidence. New York state and New York City yesterday both reported their second consecutive day of decreasing daily incidence and their lowest daily totals since March 20.
Though Russia is reporting more than 6,000 new daily incidents a day, the rate is slowing, and India's is now holding steady at 1,500 - 1,700 new cases a day.
New Zealand and Australia began easing social distancing restrictions on Tuesday.
Property market headlines
This morning Tom Bill releases his analysis of house price performance in the run up to the onset of the crisis. Central London and parts of north-east England were the weakest-performing areas for house price growth in England and Wales over the five years to 2020, potentially softening the impact on values from the current crisis.
A review of the most recent residential sales data from across the Knight Frank business reveals the numbers of offers made by prospective purchasers is slowly moving up, albeit from historically low levels. In London the number of offers made rose 21% in the past week compared to the prior week, and the number of offers accepted rose 50% over the same period. We should note that offers in total are still less than half of the level a year ago, although the direction of travel is positive.
This morning, Oliver Knight digs deeper into the findings of our tall buildings pipeline analysis. The data reveals a notable shift of the pipeline into outer boroughs, suggesting that tall buildings are becoming an increasingly deliverable form of development not limited to central postcodes. This fits with hopes in City Hall that London’s outer boroughs can densify in order to accommodate the capital’s continuing growth.
Finally, a London judge yesterday said HS2 needed to better explain the structure and support systems it plans in relation to tunnels into central London - a move the Times suggests could further delay the project.
If you have any questions, please contact me, or the team.