How COVID pandemic is impacting property prices in UK and overseas housing market

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House prices have become more affordable for the average family in countries including China, Germany, Hong Kong, Singapore and the UK in the last year.

Research by health insurance provider Aetna International found that the UK’s rental and housing markets maintained stable increases into the early part of 2020, but these reversed in mid-2020, bucking predicted gains, when the pandemic’s first wave peaked.

“While the overall changes are slight, renting has become less attractive and buying property more affordable,” the report noted.

However, it said it remains to be seen how the government’s freeze on stamp duty in mid-2020 will impact the housing market when it ends in March 2021.

In Germany, both the rental and purchase markets are lower than forecast. Price-to-income and mortgage as a percentage of income both saw a decrease of 0.7%, while price-to-rent ratios dropped inside and outside major cities by 0.9% and 2.9% respectively.

As such buying property is currently more favourable than renting, which the report flagged as a potential issue for expats considering a short-term move.

“The nation’s proactive response to the first wave of COVID-19 may well be a reason for the relatively low impact on Germany’s housing markets, which was not impacted as badly as similar countries, such as the UK,” it added.

The report reveals that, relatively speaking, house prices in China are falling. These low prices may explain the news reports from 2020 that suggest sales are booming in China. This may be due to buyers taking advantage of affordable mortgages.

Meanwhile, Hong Kong has maintained a steady purchase and rental market. However, in 2020, the rate of growth in the rental market slowed and both price-to-income ratio and mortgage as a percentage of income bucked predicted trends, with price-to-income ratios dropping by 11.9% from mid-2019 to mid-2020.

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