Property market and prices will be driven by five D’s
With coronovirus, we’re experiencing a situation we’ve never encountered before and no one knows exactly what’s in store once we come out the other end, especially when it comes to the economy.
However, one thing I am confident of is that the property market will bounce back quickly.
In estate agency we often deal with significant life-changing events that motivate our market and often group these into three categories, referred to as the three Ds.
They are debt, divorce and death, and, as you’d expect, these are all prevalent at a time such as this. So, in the current climate, it’s likely that once the market reopens for business, sadly we will see these three Ds drive potential enquiries in excess of those we’d normally be used to seeing.
But, what I’m also predicting is that two more Ds will become prominent – dependents and desks – and that this crisis will turn the three Ds into five, all of which will drive a proportion of market movement.
Here’s how I think each of the five Ds will impact on the property market post crisis:
Unfortunately, some people’s finances will be negatively affected and many will be considering the need to sell property in order to release cash tied up in their home or investment. This will create some additional supply into the market and perhaps demand also as some of these sellers look to secure alternative property in different segments of the market.
This is a very difficult one to talk about, but the virus has resulted in the deaths of thousands of people. Many of these people were homeowners, and these homes will come to
Debt:
Death:
market once the crisis is over. We must also consider that since lockdown began there has been almost no new property coming to market and people have sadly continued to die from other causes and old age.
Again, another difficult outcome of this crisis that’s been widely reported is that sadly lockdown will test and perhaps be the end of many relationships. Therefore, we do anticipate that in time there will be an increase in the number of enquiries and sales from those in this difficult situation.
On a much more positive note, lots of commentary
Divorce:
Dependents:
suggests that there will be a baby boom after lockdown. So, in four to six months’ time, the expectation is that there will be many couples looking to upsize into larger homes that meet the needs of their growing families.
Lockdown has undoubtedly changed many people’s views on their ability to work from home. We predict that homeworking will be a permanent feature for many.
For people who continue to work from home, but who spent lockdown working from their dining room tables or sofas, a home office will become much more important, and so many will
Desks:
start looking for larger homes with extra space to make this a reality.
In addition to these five Ds, there’s also another key driver which could add yet another D – discretionary. The simple fact is that people have become much more aware of what they love and hate about their homes, having spent weeks holed up in them. This will incentivise many to move.
My prediction is that once this crisis is over, there will be an explosion in movement due to the five (or maybe six) Ds driving movement like never before, which will also result in continued price growth in many of our markets.