The real estate market is mostly going on a rebound once this Coronavirus lockdown is relaxed. The prices in the housing market will surge so much due to the edging up of activity levels.
Roey Hayon says, “Before the government restrictions on movements that affected all business sectors including the real estate market, the prices of houses had grown at a very high rate since February 2017. Although this figure is from a different period, it points into a direction of optimism that the market will get better after the lockdown is eased.”
Just in April, there was a 3.7 per cent increase on an annual basis in house prices. That means the average increase in a UK home moves up from £219,583 in March to £222,915 in April. This data is calculated based on the mortgages submitted earlier in the year but approved in April.
The 3.7 per cent increase on an annual basis is an indication of significant growth during the lockdown as well as an indication that prices of houses in the UK real estate market were actually on a rebound from the uncertainties caused by Brexit before the pandemic struck.
The economic response after the coronavirus shock
As a result of the robust labour market conditions, stable political backdrop after the general election, and low borrowing costs, activities and market prices are beginning to edge up. Although the short-term economic response is still quite uncertain, the economic intervention from the government is setting the tone for a foreseeable rebound immediately after the pandemic.
“The government intervention has totalled nothing less than £330 billion. These interventions are properly set to buoy the economy at this drastic time. More so, this intervention would also help to reduce the impact of the pandemic on the real estate market than what could have been with such a huge economic shock.” Says, Roey Hayon.
Since most of the transactions that were ongoing before the lockdown started were instead put on hold than cancelled, there is a higher tendency they would be continued once the lockdown and restrictions on movement ease off as soon as possible. And this would put a limit on the impending economic damage.
Roey Hayon concludes, “The annual house prices will only enter a negative territory this year if only if there is a huge drop in demand. But with the current functionalities of things, we don’t anticipate a downward turn in house prices in the UK real estate market at any point in the immediate future.”