The Scottish housing market is unlikely to bounce back to 2019 trading levels until at least 2022, according to agents Rettie & Co.
“It’s not easy to call it, especially given the surrounding uncertainty,” says Dr John Boyle (pictured, abo e), director of research and strategy, “but as market analysts, we have to say it as we see it. It’s not pretty but it’s not all doom and gloom either.”
It predicts up to a 35% drop in transactions this year with a 1-5% reduction in average house prices followed by only modest growth.
In its Spring 2020 forecast, the company says prices should be more stable, partly due to the reduced level of transactions but also continuing low interest rates and government support packages preventing a surge in distressed sales.
Rettie & Co believes the region will see a steeper recovery than after the 2007/09 housing market crash, when the market remained depressed for about five years.
Boyle adds: “Our 2020-22 forecasts demonstrate the impact of the global pandemic on the housing market. Transaction activity is almost negligible just now and the market will not reopen in Scotland until the lockdown is over.”
He adds that requirements such as social distancing will continue to have an impact and that it’s difficult to see a return to normality for some time.
“Prices should be more stable if a lid can be kept on distressed sales. The housing market will still function post-lockdown and firms like ours will adapt to serve customers in new ways.”
Rettie & Co believes that the potential for a rise in jobless levels, especially if the lockdown continues for some time, will probably push up distressed sales and push down house prices.