While other sectors have dominated the headlines since the coranavirus pandemic hit Wales, the housing market is one area where activity has collapsed – and the long term impact could be house price reductions.
Estate agents have reported a 70% cut in transactions as most agents retreat from their offices and physical viewings grind to a halt.
It has seen many agents rapidly transform how they work and now it will depend on how long Covid-19 will lock down the economy to see what long term impact the crisis will have – and whether house values will be affected.
Tim Goodwin, of Williams and Goodwin estate agents in Anglesey, said: “What a difference a month makes.
“It is hard to believe that only a month ago we were seeing the positive upturn of the annual spring market, with enquiries from both prospective tenants and purchasers flooding in and the monthly Halifax survey showing price growth for the first quarter of the year as confidence returned to the housing market following the uncertainty of Brexit.
“Then as we reached the end of March we had to adapt to a very different world.
“Government guidelines in effect put the market on hold, with home moves being discouraged and social constraints meaning something as simple as a house viewing had become virtually impossible.
“Whilst we are still very much open for business as usual at Williams & Goodwin we already had plans in place to operate from home and it has been necessary for us to be innovative and continue to stimulate interest in properties.
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“This has ranged from offering video tours to interested parties through to carrying out online valuations and giving opinions on marketability and presentation to prospective clients through similar technological advances.
“Whilst the lockdown is likely to result in sales transactions reducing by around 70% initially, I believe that once normal service is resumed it is possible that a logjam of pent-up demand will be created as people will always need a roof over their heads.
“With interest rates having now fallen to record levels which could not have been dreamt of years ago, and the prospect of inflation looming to cover the cost of government borrowings, this could all bode well for the future of the housing market.”
David Jones, of Jones & Redfearn estate agents in Denbighshire, said: “The market is effectively in hibernation because we can’t inspect properties, we can’t do surveys and no viewings can be carried out.
“Some agents are trying virtual valuations but this is of more a gimmick to try and keep busy rather than an effective way to keep the market active.
“Most agents are fulfilling their social responsibilities and complying with regulations by being available via phone, email and social media, including us at Jones & Redfearn but some are breaking regulations by being in offices against government.
“If we can come out of lockdown in say the next four weeks the market may recover quickly with pent up demand being released.
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“However, if this drags on and we go into recession the market will be hit.
“RICS have issued a valuation alert warning that the coronavirus has the potential to cause notable reductions in value and this will cause qualified surveyors to be careful with valuations when we start doing them again.
“Mortgage lenders are being very cautious and some are now looking for larger deposits and others haven’t the staff to process applications.
“All in all, things could be okay if we can get going in May, but if it drags on, the market will suffer.”