Over just a few months, Covid-19 has disrupted almost every corner of the globe.

Savills Research has carried out a sentiment survey of Savills global residential network to assess how Covid-19 is changing the residential property market.

Across all respondents, 47 per cent anticipate vendors keeping their properties on the market at current prices, though 48 per cent anticipate some level of price reductions.

The Savills Residential Global Market Sentiment Survey provides an overview of how market conditions have changed since the start of the pandemic based on their survey of 50 experts across the Savills global residential network.

At a Glance:

• 90 per cent of respondents stated that 30 per cent or fewer of their buyers have stopped looking
• Only 6 per cent of vendors have or are considering removing their property from the market
• 30 per cent of markets reporting legal changes to better facilitate business
• Buyers likely to prioritise home offices, Wi-Fi, and green spaces in future properties

Australian Snapshot:

In Australia, Paul Craig, CEO of Savills Australia & New Zealand said it is predicted that a shortage of supply will continue for some time, due to the uncertainty in the market, however this last weekend marks an easement in home open restrictions which is a step in the right direction.

“If you are a qualified buyer, this is a great time to be on the lookout for a residential property, due to record low interest rates and attractive pricing," said Mr Craig.

“Given the encouraging progress with limiting COVID-19 in our country, why wouldn’t you want to own a piece of Australia?” 

“A recent suburb record was set during the shutdown period in Surry Hills, Sydney, where the undisclosed sale price has been reported to have surpassed the previous record by circa $4 million," said Chris Orr, Director of Residential, Savills Australia.

“Time will tell however, but the common belief amongst the industry is that we will see residential values rebound very strongly due to the lower volatility compared to other markets, lower borrowing costs for housing and the Government’s comments around the importance of both construction employment and the housing market.” 

Mr Orr said his team are seeing buyers looking to upsize while it is cheaper to do so as well as luxury assets with unique/timeless appeal and off-the-plan inquiry is increasing (with delayed settlements)
    
Mr Orr believes that the rest of this year and into early next will see a rise in distressed sales (to what extent is unknown) however these will come to market in a staggered approach and likely not until the deferred payments offered by banks come due. 

“It will be interesting to see what the increase in supply will look like and the effect it has on pricing, however, I’d expect to see an upward trending run on the market” said Mr Orr.

Asian Snapshot

Simon Smith, Head of Research & Consultancy, Savills Hong Kong said Asian countries are emerging from this at very different speeds. 

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Simon Smith, Head of Research & Consultancy, Savills Hong Kong. Photo: Savills

“In some parts life is beginning to return to normal as measures are relaxed," said Mr Smith.

"China, Hong Kong, Taiwan, Vietnam, South Korea and Japan are all reporting progress.

"Other areas are still facing challenges including Singapore, India, Indonesia and the Philippines.

“Very broadly, property market volumes are in the doldrums, partly because of physical barriers to doing deals, partly because of a sharp fall in cross border capital and partly because economic conditions have still not normalised.

“What buyers there are, are looking for deep discounts but low interest rates, fiscal stimulus and flexible lenders means that sellers have so far been reluctant to cut prices heavily.

In terms of sectors, we hear the same story across the region – that retail and hospitality have been hardest hit while industrial/logistics has held up well.

Data centres and healthcare are attracting more interest from investors."

Mr Smith said looking ahead, many regional economies are reliant on trade with the US and Europe so any full blown recovery will have to wait until those markets open for business.

Savills Residential Global Market Sentiment Survey

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