Key Highlights
- According to Zoopla, UK housing market expected to be off by – $34.77B or -L27B
- Sales in 2020 expected to be -15% below 2019
Zoopla, one of the leading online residential and commercial property resources in the United Kingdom, is predicting that the UK housing market is likely to end 2020 with a -$34.77B or –L27B deficit compared to 2019.
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Like nearly every other European Union housing market, England’s housing industry was closed for several weeks due to the COVID pandemic lockdowns. The UK’s housing market was closed from mid March and re-opened in May in England, in mid June in Wales and Northern Ireland and at the end of June in Scotland. This multi-billion-pound/dollar shortfall translates into approximately -124,000 property sales during the first half of 2020.
Pending sales were down -20% during the first half of the year compared to those at the same time in 2019. Zoopla’s data indicates that sales for the entire year will be down -15% than all of 2019 despite a strong start to the year and then a big demand uptick when the UK housing markets re-opened throughout June.
The UK’s government policy to pause its recently passed stamp duty as a way to invigorate the market once re-openings were on track helped spur demand from prospective buyers. Countering that enticement, however, was the fact that housing supply remains -10% below supply levels in 2019. Any of this sound familiar?
Richard Donnell, research and insight director at Zoopla, said that COVID-19 “…and the lockdown have shifted the dynamics of supply and demand across the housing market. The staggered re-openings of housing markets across the countries and the added impetus from the stamp duty holiday mean we expect buyer demand and new sales volumes to hold at current levels over the next two months.”
During the first half of June, UK property prices hit its highest level of annual growth in nearly two years by rising +2.7%. If Donnell’s above position plays out, home price growth out to continue throughout the second half of 2020.
On the other hand, UK Prime Minister Boris Johnson announced July 27, the same day this Zoopla report was released, that England “may” be seeing a second wave of coronavirus due to re-openings.
Donnell had cautionary comments in response to Johnson’s remarks. “For those operating in the market, and others looking in, the latest forecasts for increased unemployment and a sharp economic contraction over the next 12 to 18 months certainly seem at odds with current levels of sales market activity…we expect rising unemployment to weigh on market activity over the final quarter of 2020 and into the first half of 2021.”
Thanks to MansionGlobal.
Also read: March Home Sales Dropped -8.5% – More Than Expected, Could Pandemic Crisis Squash Push for More, Dense, Affordable Housing?, Podcast: The Stone Cold Truth About What Happens Next In Real Estate | Tim and Julie Harris
