When the coronavirus struck, business owners anticipated it having a negative effect on them. Sadly, many of them were right. They had to close, so sales and, therefore, profits fell drastically. However, that has not happened in every industry. Surprisingly, in some parts of the world, those involved in property sales have remained busy. As soon as restrictions were lifted, they were flooded with buyers looking to move quickly. The story behind why that has happened is an interesting one. Just read on to find out more.
Demand for luxury homes surges
Demand for high end homes in Florida and other luxury areas was particularly strong, during the 2nd half of 2020. According to a recent report by Redfin, US sales in this sector quadrupled. This trend has been replicated in the UK, with the top-end of the London market surging by 60%. In India, demand for luxury homes is back at pre-pandemic levels. Even places like Phuket in Thailand have seen this happen.
Investors are using property to diversify their portfolios
There are several drivers behind this mini-boom. The fact that High Net Worth Individuals are looking for ways to diversify their investments is a big part of the story. There are plenty of foreign investors snapping up $1 million+ properties in places like Florida and London. These locations are perceived to be desirable places to live. Plus, despite the global financial crisis, in most cases, the value of properties there have gone up rather than down, over the long term. Something many investors are hoping will happen again as the world struggles to find the money to pay for the coronavirus crisis.
People’s priorities have changed
However, the property sales boom is not confined to the luxury market. In many countries, there has been something of an exodus from the cities. For example, nearly 74,000 households moved out of London in 2020. This trend has been replicated in many European countries.
Space considerations
Many families who spent weeks couped up inside flats or tiny homes with no outdoor space decided they would not get trapped like that again. A significant percentage of them moved from small city homes to larger houses in the suburbs or small towns.
Homeworking played a role too. After all, working in your bedroom is not ideal. So, moving to a bigger house that offers you the chance to create a home office in one of the bedrooms or to have a purpose-built shed in the garden makes a lot of sense.
Downsizing for financial security
Living in cities is expensive. So those who had lost their jobs had little choice but to move.
However, many of those who could still afford to live in the city have decided to relocate anyway. They have realized that selling up and moving to a more affordable area of the country enables them to live mortgage-free and be far more financially secure. People have seen firsthand how quickly things can go wrong in life and have decided to change the way that they live to minimize their risk.
There is no doubt that the coronavirus crisis is going to continue to impact the way we live. So, we are going to see more interesting property market trends develop.
