Surveyors in Scotland expect coronavirus to hold back the housing market for the rest of the year, according to the March 2020 RICS Residential Market Survey.
A net balance of -81% reported a fall in demand with a 56% rise in the number of professionals reporting a decrease in new sales.
The figures were published as RICS called for a stamp duty holiday to kickstart the housing market once Covid-19 travel and work restrictions are relaxed.
New homes coming onto the market in Scotland also plunged, with a net balance of -75% of respondents reporting a downturn. While prices were reported to have risen over the past three months, a net balance expecting price increases over the next three months is now -87%.
In the lettings market, tenant demand in Scotland also fell by a net balance of -18%, with near-term rent expectations in negative territory for only the second time in 32 months.
Kieran Bonner of J&E Shepherd in Stirling said: “It was actually a very positive March until the Covid-19 crisis hit. A period of lockdown and uncertainty lies ahead.”
Simon Rubinsohn, RICS chief economist, said: “The fact that responses are negative not just at the three but also the 12 month time horizon is significant in suggesting that the legacy of Covid-19 could be such that any return to what might be described as ‘normality’ in the economy will take time and households will remain cautious for a while.”
Hew Edgar, RICS Head of Government Relations added: “RICS is not an organisation that would call for a stamp duty holiday on a whim, and indeed our view prior to Covid 19 was that it required a full-scale review. As we start to emerge from this crisis, however, it is likely that the finances of potential homebuyers will be under strain, and the burden of stamp duty could put buyers off. For those who can afford to move they may lack confidence in the market, adding to the slow down. A stamp duty holiday could be one of the ways to reactivate the housing market quickly as a short term measure.”
