As we start to see some small glimpses of (what looks like) our Government led exit strategy from the Covid-19 crisis, we have also started seeing a shift in buyer sentiment from the need to desire phase. By this we mean that people will start to regain confidence in the real estate market and subsequently conduct their property search with the added element of desire, which was most likely outweighed by need and necessity during the earlier stages of the crisis.
Going through any significant change or crisis it is common for most people to go into a form of contraction where activity or decisions are based primarily on necessity. So unless something is necessary to enable the basic functions of a lifestyle to continue, it simply will not happen. This has been very evident over the past month where the number of people actively involved in the property market decreased significantly to the tune of around 50%. However, the actual level of transactions across both sales and rentals only decreased by 25%. The two major online real estate portals reported that the number of views of properties declined significantly in late march but by the end of April they had increased to record levels. These two examples are major indicators of people in the market moving from primarily needs-based decision making, to a combination of needs and desires.
When buying real estate, the driver is often not just based on needs or desires. The decision to move to a home that better suits your family will always be made on a needs basis in conjunction with the desire to have other features (such as a better lifestyle, more space or a nicer neighbourhood). All of these desirable elements are triggered by an emotional response to a property, mainly on how a property presents visually and how the buyer can imagine themselves living a better life in that home. We believe that how a property makes you feel is the number 1 motivator when purchasing real estate.
Coming out of this crisis will take some time but we are already seeing the signs of this desire led buyer activity coming into play, indicating the re-emergence of confidence in the market. It has also been announced this week that open homes and public Auctions can resume, where we will begin to see more of this as the year goes on.
If you need any property advice during this time or beyond, feel free to get in touch.