International property adapts to post Covid-19 reality
Category International
While interest rates have been cut to the bone globally which has provided some impetus for residential property demand, some countries such as the UK are implementing added measures and financial incentives to kickstart the market.
By July, property viewings in the UK spiked by 45% with buyers and sellers retuning to the market with some vigour, but overall sales were still down compared to the prior year according to most of the large real estate companies.
The UK government has therefore implemented a stamp duty holiday which could save buyers up to £15,000. This has triggered a significant uptick in demand for property with some 43% of young investors indicating that they intend investing in property to take advantage of the stamp duty holiday.
According to the programme, those who buy properties worth £500,000 or less will pay no tax, while those purchasing more expensive homes will benefit from reduced costs. The programme applies to England and Northern Ireland and extends until the end of March 2021.
Additionally, Scotland and Wales have also launched their own stamp duty cuts which will also last until March of next year.
In Scotland, land and buildings transaction tax, which is the equivalent of stamp duty, will only apply on home sales worth more than £250,000, rather than £145,000 as before.
In Wales, buyers will pay no stamp duty on purchases up to £250,000, saving up to £2,450 per property.
Real estate agencies across the UK are reporting that there has been a notable uptick in buyer enquiries and sales.
Interestingly, the UK is seeing similar trends to South Africa insofar as house prices are concerned. Agents have reported that pent-up demand has seen house prices hold steady.
Aside from the work-from-home trend, UK agents are reporting an uptick in demand for larger, greener homes. The desire to move is fuelling a short-term boom in activity, particularly in prime rural markets as buyers look to leave London for more space and better value in the surrounding towns.
An article on Fortune.com alludes to a similar trend in Europe where wealthy property buyers are looking to leave the busy cities for a better quality of life.
We are seeing a similar trend in South Africa and this will no doubt mean that smaller cities and towns across the country and coastal areas will see an uptick in demand.
Author: Gina Meintjes
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