Over just a few months, Covid-19 has disrupted almost every corner of the globe. In the residential market, this has led to transaction numbers drawing to a standstill in many countries as lockdown measures prevent sales. Savills Research has carried out a sentiment survey of Savills global residential network to assess how Covid-19 is changing the residential property market which shows:

• 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 are reporting legal changes to better facilitate business
  
  
• Buyers are likely to prioritise home offices, Wi-Fi, and green spaces in future properties

Across all respondents, 47 per cent anticipate vendors keeping their properties on the market at current prices, though 48 per cent expect some level of price reductions. On the whole, few vendors are leaving the market and the majority of buyers are still looking for properties, creating many opportunities for business after lockdowns are lifted.

The Savills Residential Sentiment Survey is designed to take the pulse of residential property markets worldwide which is important in today’s fast-paced environment. The findings provide a snapshot of current market conditions and future trends based on an internal survey of 50 experts across the Savills global residential network.

Current market sentiment

When asked what proportion of buyers are still looking and will travel as soon as lockdown is lifted versus those who have put their plans on hold for the time being, there was a fairly even distribution across both. Some markets such as Lake Como in Italy have found more buyers have put plans on hold for a period. Others are still looking and will travel as soon as lockdown is lifted, such as the majority of buyers in the South West of France where there is significant proportion of rural properties.

One clear trend is that, whether buyers are planning to look straight after lockdown or will pause briefly, very few are stopping their search altogether. Over 90 per cent of respondents stated that 30 per cent or fewer of their buyer have stopped looking altogether.

The majority of respondents stated that a high proportion of their buyers expect to get a lower price than before the lockdown. This is particularly noticeable in countries like Spain which have seen severe lockdowns and where there is more available stock. There are a few exceptions: in some luxury second home hotspots including the French Riviera, very few buyers are expecting a lower price.

As well as very few buyers withdrawing from the market altogether, the survey highlighted that only 6 per cent of respondents are seeing vendors considering taking a property off the market or have already done so. The remaining vendors are broadly split into two categories: those who have or are considering lowering prices and those who are keeping their property on the market for the same price. 

Long-term impact of Covid-19

Buyer demand

An increase in homeworking after Covid-19, which is expected by 86 per cent of respondents, is likely to have a direct impact on the residential market as buyers shift priorities. Three quarters of respondents believe that demand for a home office will increase, and 83 per cent believe that good Wi-Fi will be a priority for buyers going forward.

Green space in its various forms is also marked as a priority for buyers with 73 per cent of respondents agreeing that demand for a green spaces for urban buyers will increase. A further 61 per cent of respondents believe that demand in rural areas will be on the rise. These design and location desires are factors that developers across the world will need to take into account when designing the homes of the future.

Business practices

While the survey demonstrates that the majority of buyers and sellers are still keen to transact, the various lockdowns and social distancing have made business as usual difficult. Technology has enhanced communication from a distance as three quarters of respondents are using video conferencing and half are doing video tours.

There have also been some swift legal responses to make business possible. Changes to their legal systems were reported by 30 per cent of respondents. For instance, the introduction of the  Electronic Authentic Act (AAE) in France has increased flexibility of notaries with electronic writing now having the same probative force as a writing on paper (Article 1366 of the French Civil Code). We have also seen some buyers appoint local power of attorney in order to keep a transaction moving.

Further information

Read more: Market in Minutes:Savills Residential Global Market Sentiment Survey