Comparing the number of users on Bproperty website’s ‘buy’ segment of March with July, website traffic increased by a staggering 90%
A big question that most people have at this moment is whether we are past the peak of the Covid-19 pandemic that has been disrupting all our lives for months now? While some say we are over the hump since after June-July and are on the path to recovery, others disagree and state that the pandemic may return in the coming days. Despite the schism, the world has been returning to somewhat normal during the last few months now — albeit with the added safety precautions in place — as more and more economic activity begins to take place again. In that same tone, while it never really fully stopped, the global real estate market has also restarted its activity.
This past quarter (July-September) was crucial for the global real estate industry in the sense that the market was in need of some direction or sign as to how to progress forward in the face of the uncertainty which has been gripping the sector since the onset of the pandemic and its subsequent lockdown period. For months, industry people had been wondering about the state of the market as questions filled their minds such as whether the demand for real estate will persist in the light of the economic downturn and would the market need to adapt to any changes in trends or needs that may arise from the entire situation.
Globally, the real estate industry has been posting optimistic numbers throughout the third quarter with some market segments performing better than others.Most of the European housing market has been very resilient throughout the entire period, but Q3 saw a resurgence of activities in the real estate sector as pent-up demand during the initial coronavirus pandemic and the lockdown period was somewhat released with the ease of some restrictions.In the UK, the number of mortgage approvals sharply rose from 9,300 in May to 66,300 in July — which was also a 66% jump in mortgage approvals from the month in June.The resurgence of demand can mostly be accredited to two things — 1. The gradual resumption of economic activities and 2. Government-introduced measures to boost the housing sector such as holiday on stamp duty.
Similar measures have also helped regain a lot of the lost momentum for the US housing market in Q3 which was thought to be struggling just a few months ago. That help came in the form of historically low mortgage rates.Two of the most popular mortgage options in the US, the 30-year fixed mortgage rate and the 15-year fixed mortgage rate, saw a significant reduction in rates with the former which stood at 2.87% and the latter which stood at 2.37% at the beginning of October. That is quite a contrast to the previous year when the rates were 3.73% and 3.19% respectively. The 30-year fixed rate was 4.62% a year before that.
The record-low rates have created a frenzy among US home buyers and have yielded an 8.8% rise from the previous month in pending home sales according to the National Association of Realtors (NAR)— far exceeding the expected 3.1% increase. This number was posted on top of another sharp rise from July to August which saw pending sales climb by 13.1%.Single-family homes are going off the shelves as soon as they are being put on as people are looking to move to the suburbs in the US and rural areas in search of safe havens away from densely populated areas. But, despite the demand, the supply is as slow as it was before the pandemic.
As a result, instead of the US housing market being a buyers’ market right now — as it was the case back in April — the market has flipped to the seller’s side as supply remains low and demand quite high. And this phenomenon is not contained in the US. This is happening all over the world.Housing prices in the UK rose by 1.6% in September from the previous month. The current average price is 7.3% higher from the same period last year. In Germany, the average housing prices are 11% higher than they were 12 months ago. Singapore residents saw a 0.8% rise in property value during the third quarter which came on the back of an 11-month high in home sales. However, not every property market is the same as the top six Indian cities saw property prices slump by 2-6% during the third quarter.
So far, the housing market of Bangladesh has produced inconclusive numbers. The verdict is still not out on whether there has been an increase or decrease in property value across Bangladesh, and whether any fluctuations can be accredited to the ongoing pandemic or the changes are just the results of general pricing behaviour. But what can be said is that the market is ready to welcome real estate enthusiasts back just as they are ready to be back, as evidenced by the growing amount of real estate activity over the last three months.
The lifting of lockdown at the end of May signalled the restart of activity for the real estate sector of Bangladesh. However, it took some time for activity to properly resume and did not really begin until late June. By that time, the months of pent up real estate need/demand — coupled with the new regulations that were introduced by the budget as well as lower interest rates that came into effect in April this year—helped the real estate market start on the right foot. Comparing the number of users on the “buy” segment of the Bproperty website of March (the most peak of the lockdown period in Bangladesh) with July, website traffic increased by a staggering 90%, making the number of monthly traffic even higher than that of pre-Covid-19 times.
The high volume of website traffic also translated well in the real world as Bproperty recorded the highest volume of property transactions taking place in August. This achievement was transcended even further in September as the organization achieved 20.61% more transactions. However, despite the increase in transactions, the number of incoming property requests slightly decreased from August to September by about 6%.But overall, the number of incoming property requests has experienced significant growth since the lockdown period indicating more decisiveness by those interested in property.These figures are expected to grow in the coming days as all sorts of economic activities nearly return to normal during October.
The recovery signs are not limited to the housing market though. The global commercial real estate (CRE) market has also shown signs of recovery since the resumption of“normal” life this quarter. While some CRE subsections have shown greater signs of growth than others during this quarter, there is hope that the entire segment will soon be recovering, especially the retail and the office sub-segments. The retail sub-segment, in particular, had been devastated by the restrictions but recent data has shown that, even though the frequency of visits has decreased by consumers, purchase quantity has increased.
Overall, the third quarter of 2020 has been good for the real estate industry but more importantly, the industry has shown signs of positive times ahead. And while the division of whether the peak of the pandemic has already been crossed or not will still remain, the economy and the real estate industry as a whole is on the right track — a track to recovery.
This article is being published under special arrangement as part of a partnership with Bproperty