Despite COVID Outbreaks, Many International Cities Enjoying Sales Recovery in July.

 

According to Knight Frank's latest Global Property Index, and despite localized outbreaks, a lot of global cities are seeing sales volumes continue to improve with April so far looking to be the low point for residential activity. houses

New outbreaks have occurred in portions of the US (Southern & Western states), Spain (Catalonia, Galicia) as well as Melbourne which has led to the city entering lockdown again and the state border closing between Victoria and New South Wales, for the first time in 100 years. Perth has also attempted to limit international arrivals to 525 a week.

The UK has also released its long-awaited 'traffic-light' list of 74 nations and territories which Brits can travel to without self-isolating from 10 July. Whilst France, Spain, Italy and Germany are included, Portugal, the US and Canada are now absent. In the case of Australia and New Zealand, despite being on the list, their borders remain closed. People resident in Scotland, Wales and Northern Ireland will still have to self-isolate on their return from "amber" rated nations under the provisions of the accord.

In the Eurozone, Capital Economics has updated their GDP predictions upwards for 2020 since activity has risen faster than they predicted.

In the UK, Chancellor Rishi Sunak unveiled a raft of measures to improve the UK's economy including a stamp duty holiday for property priced below £500,000 which will start with immediate effect.

Europe

Knight Frank's new Spain Covid-19 study emphasizes how the private rental sector (PRS and build-to-rent) in the country's largest cities is likely to prosper as banks grow more cautious when it comes to lending to individuals but continue to look more favorably on funding residential projects.

New analysis indicates where the most costly residences in Spain are located. Data from online platform BrainesRe pinpoints the 25 Spanish towns where average prices topped €3,300 per square meter in the first quarter of 2020, including eight municipalities in the Balearic Islands.

In the UK, June showed additional indication that price decreases are bottoming out in top London property markets, as quarterly drops decreased across the capital. In excellent central London, prices declined 3.6 percent in the three months to June, which was down from a number of -4.4 percent observed in May.

Yesterday, UK Chancellor Rishi Sunak announced a stamp duty holiday for UK buyers until 31 March 2021, to breathe some life into the UK's home market.

Asia Pacific

Several cities around Asia Pacific saw residential activity ramp up in June, with China and Hong Kong leading the way. Melbourne and Jakarta saw sales volumes decrease due to the persistent issues with Covid lockdowns. Asking prices are now climbing in five of the 19 cities we track and sales are moving higher in eight locales.

For Singapore, despite its slowing economy and the impact of US-China tensions, prices have decreased by only 1 percent since Q4 2019 according to Knight Franks new analysis - Where next for Asian Investors?

Cross-border activity across the region is projected to increase in the second half of 2020, backed by low loan rates, currency volatility and certain discounts. With many investors searching for stability, diversity and matured markets, Singapore, Australia and the UK are expected to be three of the markets most strongly in demand.

In amid the quick fire of legislation responding to Covid-19 emerged some minor adjustments to Australia's foreign investment restrictions. The key change for international purchasers is the expanded duration from 30 days to six months for the application procedure, our local team have created a comprehensive guide with all you need to know.

The newest pricing figures from CoreLogic show a small dip in June, decreasing by 0.7 percent following a 0.4 percent loss in May. Despite recent decreases, house prices are still up 13.3 percent and 10.2 percent over the year in Sydney and Melbourne respectively.

Plus, it's not only the UK reconsidering stamp duty, a draft assessment of Australia's tax and federal-state funding arrangements contains, amongst other potential changes, a recommendation to replace stamp duty with a land tax.

US & Canada

In the US, the average value of a home purchase mortgage application set a new high of $359,000 at the end of June, according to the US Mortgage Banks Association. However, it's unclear that this will transfer to house price increase according to Capital Economics given that prior increases in 2008 and 2011 were not accompanied by an acceleration in home price rise. One potential explanation for the increase in mortgage size is the greater strength of new home sales compared to existing homes given that a new home is on average 12 percent more expensive.

News this week that international students at US universities and colleges may no longer be permitted to stay in the nation if their courses migrate totally online owing to coronavirus, might have ramifications for important property markets where student populations account for a big component of housing demand.

Gzero, a subsidiary of Eurasia Group, a political risk analysis business, believes roughly one million international students are presently awaiting confirmation of their institution or school to confirm teaching arrangements for the new term.

 

In Canada, Greater Vancouver, which is now in Phase 3 of its Restart Plan, had 2,497 properties change hands in June, up from 1,506 in May, this represents the sixth highest number of monthly sales since May 2018. Despite the pandemic, sales volumes are up year-on-year with 11,471 sales in the first half of 2019 compared to 10,992 in the first half of 2019 demonstrating a degree of resilience in what has been a sluggish market in previous years due mostly to tax changes.

Middle East

Knight Frank's new UAE Residential Market Review illustrates how prior to the outbreak of the Covid-19 outbreak, Dubai's housing market had started to show early signs of a resurgence in demand. In the year to February 2020, transaction volumes climbed by 24 percent compared to the same time a year earlier, making it the greatest start to the year the market had observed since 2017.

Despite stringent containment measures during lockdown, activity in Dubai's home market did not come to a total halt. Whilst transaction activity has clearly slowed, the extent of the contraction has been rather restricted. In the year to June 2020, transaction volumes have declined by 14.4 percent compared to the same time a year earlier. Average prices, which declined on average by 5.6 percent in the year to May 2020, are projected to stay under pressure, as a result of demand decreasing and the surge of supply projected in 2020.