By now the market is set to experience a significant slowdown, with estate agents having closed their doors, as Kenyans have been told to stay at home and put any moves on the minimum.
Unfortunately, this could result in house sales plunging in the next quarter when compared with the same period in 2019. Furthermore, buyer demand has dropped in the weeks leading up to April and that a ‘rapidly growing’ proportion of sales are falling through.
This timeframe isn’t particularly useful in helping us understand how coronavirus affects house prices, as it covers transactions that would have been agreed in 2019 but were only completed and registered in January.
With that in mind, we’re unlikely to know the true effect of coronavirus on house prices for a couple of months at least especially with the land registry minimally available.
Do you think coronavirus affects house prices?
It’s too early to say exactly what impact the outbreak will have on the property market, but this is likely to mirror the rest of the economy. In the short-term, house price growth will stagnate as there will be fewer transactions going through. But as we saw with election periods, the property market is very sturdy, so it’s highly unlikely that prices will crash in the coming months.
The impact of external shocks [such as COVID-19] is to reduce consumer confidence and put a brake on housing demand and the number of people moving home.
We do not expect any immediate impact on prices. Beyond the next few months, the outlook largely depends on how the government’s package of support for businesses and households reduces the scale of the economic impact.
The timing of any rebound in housing market activity depends on when the new restrictions are lifted and to what extent households and businesses are able to return to a normal way of life.
Will estate agents still hold viewings?
The rules imposed by the government mean that estate agents have needed to close their doors and send their staff to work from home. This means that in-person viewings will be limited until the restrictions are lifted.
What can you do if you’re in the process of moving?
People currently in the process of moving home face uncertainty as to whether their deal will go through.
How are lenders helping homeowners?
Last week, the government announced that homeowners affected by coronavirus will be able to benefit from mortgage repayment holidays of up to three months. Borrowers worried about financial hardship should contact their lender directly to discuss their options, which could also include temporarily deferring interest payments, extending the term of the mortgage or moving to an interest-only basis for a short time.