The effect of lockdown on the local housing market in Q2 of 2020
Every quarter, the Centre for Real Estate Research at the University of Aberdeen Business School uses ASPC data to monitor trends in Aberdeen’s property market. The report released in the second quarter of 2020 demonstrates how the current situation has affected our local housing market. However, since the ease of lockdown insertions have quickly risen to near-normal levels.
We knew that the Government strategy of lockdown was going to have severe effects for nearly all areas of business; the latest report shows just how dramatic that has been. Compared to the same period in 2019, sales fell by 64%. Given the severity of the lockdown provisions, this should not be regarded as unexpected.
Flats were most affected with a drop in the volume of 69% year on year.
Semi-detached houses saw a drop of 61% year on year.
Detached houses saw a drop of 63% year on year.
Unsurprisingly, this was matched, during the second quarter, with an even more severe drop in properties coming to market. In the early part of lockdown, new insertions on ASPC dropped almost to zero. Since the easing of lockdown, insertions have risen, quickly, to near-normal levels. This activity appears to be matched by sales, although we must bear in mind that sales were already at lower levels before lockdown.
One interesting factor is that sales that are taking place are taking place, generally, at a price level slightly below the asking price. This may be a good time to buy.
The inferences to be drawn, if any, from the second quarter are subject to great caution. The low activity, resulting in reduced numbers of transactions, means it would be unwise to reach any fixed view of the current market. The welcome return to more “normal” activity, shown in the last 4 weeks, needs to continue for the remainder of the year before we can say we seem to be over the worst.
The full Quarter 2 of 2020 report can be read here: https://www.aspc.co.uk/media/1921/second-quarter-2020.pdf