Ravi Chandran
Moving house is more likely for one in four people in the next 12 months as a result of the Covid-19 pandemic
The Knight Frank Global Buyer Survey released today analyses the impact that the Covid-19 pandemic has had on property markets and, in particular, on residential buyers’ attitudes around the world.
The survey, representing the views of over 700 clients across 44 countries highlights that moving house is very likely for a large number of people.
The survey said:
- The UK, Spain and France, are the top three locations for those considering a move abroad post-Covid-19
- Improved access to quality of healthcare is now the second most important motive behind a property purchase
- Buyers expect property prices to decline over the next 12 months, although 53% of respondents say their budget has remained the same or increased since the start of the crisis
- Over a quarter of respondents say they are more likely to buy a second home as a result of the pandemic
- Over half of respondents have either travelled abroad already or will do so within three months of borders reopening
Kate Everett-Allen, Knight Frank’s head of international residential research said: “The crisis has fundamentally changed the way we live our everyday lives with the home now a hub from which we work, exercise, learn, socialise and relax.
“With demands on the home expanding and people having had time to reflect on the way they live and use their space, it is inevitable that as we ease out of lockdown these changes will have repercussions on property markets around the world.”
Some of the survey findings are to be expected – a desire for more outdoor space and a home office for example. However, foreign governments’ handling of the Covid-19 crisis has also become a key consideration for second home buyers around the world.
Future Buying Intentions of those that may be moving house:
One in four people surveyed said they were more likely to move in the next 12 months as a result of the pandemic, with most of these respondents seeking a different property in the same location (40%). Some 26% said they are willing to move to a different property elsewhere in the same country and 34% of those considering a move are considering a purchase abroad (9% of all respondents).
The UK, Spain and France top the list of preferred destinations to purchase a home, followed by Australia, Canada, Switzerland and the US. All countries that offer a good quality of life, political stability, a secure currency, excellent education systems and in normal times are easily accessible. New Zealand, Portugal, Malta and Norway also ranked highly.
For buyers from Asia-Pacific who are moving house – represented by respondents from Australia, Hong Kong, India and Singapore – upgrading the family’s main residence ranked highest as the reason for purchasing, with improved access to quality healthcare ranking second, followed by business or employment reasons in third place.
Nicholas Keong, Head of Residential International Project Marketing, Knight Frank Singapore, shares: “UK and Australia have historically been important destinations for Singaporean homebuyers looking abroad, in part driven by the continued thirst from their children to pursue university education overseas. Having had the time to reflect during the pandemic, it’s understandable that homebuyers are relooking at the spaces they currently live in, which has become key considerations when thinking about their second home abroad.
“Unsurprisingly, homebuyers are looking for larger apartments with at least 2 bedrooms, 2 bathrooms and an outdoor space. These will be homes that their children can live in whilst overseas, yet have sufficient space for visiting parents. With new ways of living emerging from the pandemic, we’re seeing homebuyers gravitate towards developments that are integrated with basic and comforting amenities, such as supermarkets and cafes on site, as well as those with large amounts of green and recreational space.”
Victoria Garrett, head of residential, Asia Pacific, said: “The desire to upgrade their family homes is – and has historically been – the primary motivator for many residential buyers in Asia Pacific. Price adjustments for the remainder of the year are likely to fall between 5% to a maximum of 10% across the region. This may persuade buyers sitting on the fence to enter the market at what they consider to be opportune prices.
“With the pandemic at the forefront of buyers’ minds, improved access to quality healthcare is now a key consideration for many homebuyers, particularly in Asia where multigenerational households including young children and senior members are the norm.”
“Unsurprisingly, many homebuyers are citing business or employment reasons as one of the primary motivators for buying property abroad. Since the start of the pandemic, we have seen an increasing number of expats purchasing a property ‘back home’. This has partly been driven by people moving due to employment changes but also families reassessing their priorities. Covid-19 has really made people take stock of their priorities and what is important to them and their families in terms of lifestyle,” Garrett added.
Lifestyle buyers look for when moving house:
After a period of confinement, the message from survey respondents, not surprisingly, is that buyers want space. Forty-five per cent of respondents say they are more likely to buy a detached family home than they were prior to Covid-19, with waterfront homes (40%) and rural homes (37%) also in favour.
Nearly two-thirds of respondents say they are more likely to work from home post-lockdown, which explains why 64% say a home office is now more important. Thirty-two per cent say their working lifestyle will remain the same as before, suggesting the office still has an important role to play as a hub for innovation, collaboration, education and socialisation.
Unsurprisingly, 66% of respondents say large gardens and outdoor space are more important, with the lockdown period having emphasised the connection between wellbeing and the great outdoors. Privacy is also in demand with 52% of respondents saying it’s more important, and 33% are more likely to want an annex for family members, with Covid-19 perhaps underlining the desire to have elderly or extended family members close by.
Travel is a critical factor, not just for those wanting to secure a retreat abroad but for existing home owners keen to recoup some lost income from 2020’s rental season. On this issue, there is a degree of confidence emerging – over a quarter of respondents have either travelled abroad already or will do so within one month of borders reopening. Another 25% will travel within one to three months, 37% between six and 12 months, and only 13% said they would wait 12 months or more before embarking on an overseas trip.
Prices are important when moving house:
The survey highlights that buyers expect prices to fall over the next 12 months. The Knight Frank Prime Global Forecast, conducted in April 2020, shows that on average prices are anticipated to fall in 16 of the 20 cities tracked in the report in 2020.
Of the 56% respondents that expect prices to fall over the next 12 months, 27% expect prices to fall by less than 10%, but 25% expect no change and 19% expect prices to increase.
Some 53% of buyers believe their budget has either remained the same or increased since the start of the crisis. With few opportunities to spend during lockdown, it is likely buyers have spent less and saved more. However, over 30% of respondents believe their budget has declined by over 10% since the start of the crisis, no doubt as a result of companies having to resort to salary cuts, reduced hours or redundancies.
Some not moving house may consider second homes:
Over 26% of respondents said they were more likely to buy a second home as a result of the pandemic, presumably to enhance their lifestyle and to use as a retreat in the event of a second spike. Knight Frank data supports this view, with a surge in enquiries witnessed immediately after lockdown in prime second home hotspots across France and Italy.
Mark Harvey, head of international sales at Knight Frank said: “Mark Harvey, head of international sales at Knight Frank said: “Buyers are generally seeking three key factors; good broadband, quality healthcare and a property capable of generating a reliable income. We’ve seen Europeans take shorter holidays across multiple locations in recent summers, but I think we may see a return to the traditional European summer with families decamping for four to six weeks at a time and entertaining family and friends in one location. At the heart of this change in buyer attitudes is wellness and family, which is why I think such trends are likely to endure.”
Almost one in three respondents (32%) is more likely to want a second home that they can extend, and 29% are more likely to seek a property offering secondary accommodation.
Nearly two-thirds of buyers say when looking for a second home abroad they would be influenced by the government’s handling of the Covid-19 crisis. Countries such as Germany, Austria, Greece, the United Arab Emirates, Singapore and New Zealand may, as a result, rate highly amongst second home buyers in the coming months.
