2020 Housing Market Stocktake: Covid-19 price dip may not be so sharp, as chronic shortage lingers.
We now expect a shallower correction in house prices of 6%, down from 9%. With short supply persisting, our projected house price falls should meet strong resistance.
The regions have fared far better than expected. Covid lockdowns barely affected farming, and the ‘working from home’ trend is fuelling demand.
The supply of homes has increased sharply. But we’re still falling short to the tune of 80,000 houses. The impact of Covid-19 casts a long shadow over the construction industry into 2021. Commercial property looks likely to
bear the brunt of the adjustment.
There are 3 strong foundations supporting the housing market:
1. The housing market has a chronic shortage;
2. Mortgage rates are at record lows;
3. Population growth will continue, after the disruption.
In the report, we provide a regional breakdown. We asked our network of regional managers to give us a ‘feel’ for
activity across the regions. We were encouraged by the level of optimism, especially in the farming heartland.