How is Covid 19 shaping the local housing market?

The findings show an expectation that house prices will fall and that buyers, especially first-time buyers, are now looking beyond ‘location, location, location’.

Despite a predictable sharp decline in demand in April and May, interest recovered quickly in June once ‘lockdown’ measures began to be eased.

PropertyPal has since been recording record high numbers of visits to its website, plus enquiries, suggesting that the housing market is already in recovery mode.

The research was carried out at the end of May, with almost 1500 first time buyers and home movers taking part.

Of that total, only 300 people who had planned to purchase a property in 2020, prior to the pandemic, have decided to abandon their plans for the time being. Yet, almost 400 respondents who had not intended to buy pre-Covid, have now decided to do so.

It seems that the prospect of potentially lower prices has motivated some property buyers to ‘get into the market’ at the earliest possible opportunity.

When respondents were asked their views on prices going forward, well over half felt that a price reduction up to 10% was likely.

Around 900 respondents (60%) felt that they would stick to their purchasing ambitions that they had pre-Covid, but a significant 330 first time buyers (22%) said they would now be seeking more affordable properties.

Interestingly, in terms of location, first-time buyers rate a ‘sense of community’ as the third most important issue after internet/connectivity and proximity to existing family members. Outside space has also been highlighted as a priority, suggesting that the value of a garden at the height of ‘lockdown’ cannot be over stated.

In terms of property features, the provision of a ‘home office’ has become more important in the light of Covid 19, reflecting the recent cultural shift to working from home.

Among home movers, however, some are having second thoughts. A significant 14% of that group are now looking to more affordable properties. Only 2% of home movers are intending to buy an apartment or a terraced house with the vast majority still preferring to purchase detached properties (75%) or semi-detached homes (11%).

The reality at the local level, however, appears to be somewhat different.

Online Estate Agent, Kevin Hinds of Quicklisters, says that contrary to the report’s findings, there has been no indication of a fall in prices.

“In fact, it’s quite the opposite”, he says. “The pandemic has created more reasons for people to consider moving, as their circumstances may have unexpectedly changed. Working from home and wanting to live closer to family members are new dynamics affecting the market.

“With record low interest rates set to continue, there is plenty of encouragement out there to keep people motivated.

“House prices in Derry have recovered slowly but surely since the 2013 ‘slump’. Pre-Covid was very busy with many new buyers registering and now the abolition of stamp duty has really helped to boost sales of the more expensive properties.

“As we emerged from ‘lockdown’ in the middle of June, Quicklisters has literally been run off its feet,” says Kevin.

The managing director of Oakland Estate Agents, Charlie Gallagher, agrees.

“Activity was subdued for obvious reasons during most of the lockdown. People were understandably nervous, but once measures were lifted last month, it was as if the floodgates had just opened. There was clearly huge pent-up demand. Prices have remained as strong as they were pre-Covid and although lenders have revised some of their criteria regarding deposits, there are plenty of attractive deals now to be had.”

According to Kevin Hinds of Quicklisters, “lenders will have to encourage borrowers, as the property market will be key to stimulating any economic recovery.”

Both property experts agree that contrary to the popular view that this unexpected recession would impact negatively on the local property market, the reality is somewhat different. For now business is positive with plenty of confidence going forward.

At Oakland Estate Agents, Charlie Gallagher remains up-beat: “The enthusiasm among local buyers and sellers has certainly not diminished.”