In response to the current outbreak of coronavirus (COVID-19), a lot of people are asking whether it is still a good time to be buying and selling or whether they should wait until the coronavirus (COVID-19) outbreak has passed.
It would be ridiculous to say that the outbreak won’t have an effect on the property market. Of course, it will: anything that negatively affects the overall economy will have a negative effect on the property market. People’s movement have obviously already been restricted and will be restricted more in coming weeks.
Raeside Chisholm have been at the forefront of residential conveyancing for many years. We have therefore been through a property market crash, a banking crash and a global financial depression and survived. We have also learned a lot of valuable lessons that we can pass on.
Our view is that the impact on the property market in most parts of Scotland need not be as bad as many people fear. Here’s why
Buyer Demand is Starting from an All-Time High
We are starting from a position of extremely high buyer demand and low supply to the market. We don’t see that position changing. Even if half of the buyers in the marketplace at the time of writing dropped-out, the market would still be buoyant.
Even this week, most properties are going to a Closing Date where multiple parties bid, blindly against each other. Often, the property receives 10, 20 or more offers at these Closing Dates. If demand halves, that’s still 5, 10 or more offers at the Closing Date.
Of course, high demand and lots of offers at Closing Dates make for some spectacular selling prices: as much as 30% above the Home Report valuation. Less demand will undoubtedly soften that a bit. Nevertheless, a seller should still get a good price. And, as for whether you will sell at all: it only takes one person to buy a house.
Supply of Properties for Sale is Likely to Drop, Reducing Competition
The supply of properties coming to the market is likely to reduce.
In the past decade, in times of uncertainty such as IndyRef or Brexit, seller behaviour has been more affected than buyer behaviour. When fewer sellers put their properties on the market, there is less competition against your property. So, even if there is a reduction in buyers in the marketplace, most likely that’s matched by the reduction in properties for sale.
You Are Buying and Selling in the Same Market
If you’re a seller, very often you are a buyer. If you are buying, you are buying and selling in the same market. So, if you get a little bit less for the property you are selling, the chances are that you are also going to purchase your next property for slightly less money too.
Cooler Market Conditions Might be Good News for Frustrated Buyers
For buyers, anything that slightly ‘cools’ the market from its previous, overheated state is going to be welcome.
We submit dozens of offers on behalf of property buyers every week. Most of those properties are going to a Closing Date where there are several Notes of Interest (interested parties who are given an opportunity to make an offer at a specific time and date). In early 2020, our clients have been successful on approximately 1 in 3 occasions. Some of our buyers offer unsuccessfully on several properties before securing their home, in spite of the quality of advice that our dedicated Purchasing Team provides.
After several years of property price growth and a shortage of properties coming to the market, the property market is likely to become a bit kinder to property buyers in Scotland.
We’re Here to Help
If you are thinking of buying or selling your property, our expert team is here to talk you through the best approach to getting the best value in the current circumstances.
