The ‘Covid effect’ on global home prices. And it is not gloom and doom.

KUALA LUMPUR (May 15): The Covid-19 pandemic seems to have impacted home prices in a strange way. According to a report by CNN Business real house prices in the Organization for Economic Cooperation and Development (OECD) countries rose by close to 7% between the fourth quarter of 2019 and the fourth quarter of 2020, or “the fastest year-on-year growth in the past two decades”.

With the predicted economic slowdown from numerous countries locking down to “flatten the curve” of the virus spread, the realistic fear was for house prices to collapse. Bankruptcies and unemployment were supposed to gobble up disposable incomes.

But no. The US broadcaster explained that government intervention has helped much bolster the home markets “temporarily banning repossessions and providing trillions of dollars of support for workers and businesses”.

“Interest rate cuts kept mortgage repayments affordable in many places, while temporary reductions to purchase taxes in some markets spurred home buying” and these “measures cushioned the housing market from the coronavirus recession” it added.

The pandemic also prompted the more well-heeled to flee “cities for larger suburban homes with more outdoor space in the anticipation that they won't need to commute into central offices as much even after the pandemic ends”, said CNN.

In the UK, towns within near London, such as Bishop's Stortford (pictured) and Winchester, have seen property values spike.

"Anything with a home office within an hour train ride of London is going for 10% above market value," Daniel Harrington, international head of growth at upmarket estate agent Fine & Country told the news network.

"In 38 years of buying and selling homes I haven't witnessed a market like it.

“There have been stories of buyers paying £10,000 ($58,180) plus just to be able to view a property," said Henry Pryor, a UK buying agent.

He explained that with “inventory levels” in the UK some 30% below the norm, “people are panic-buying properties".

"Twelve months ago, people were panic buying toilet paper for fear they might run out. That's very much the sensation we have today [in the housing market]," he quipped.

Meanwhile across the pond in the US, CNN also reported that the number of sales of existing homes reached the highest level in 2020 since 2006, based on figures provided by the country’s National Association of Realtors

“House prices rose 9% in 2020 and have continued to climb, with the median price of an existing home hitting a historic high of US$329,100 (1.36 million) in March,” it reported.

Back in Europe, Michael Heming, master licensee for Fine & Country in Germany, Austria and Switzerland revealed that German homes “are selling within two weeks of being listed and brokers are struggling to secure listings”.

"It's a very strong market and prices are going higher and higher," Heming told CNN.

Get the latest news @ www.EdgeProp.my

Subscribe to our Telegram channel for the latest stories and updates 

Click here for more property stories