According to the May 2020 QV House Price Index (HPI) results out today, the momentum in the property market prior to the pandemic has since been lost. However, with the number of residential property sales extremely low through April and May, a clear and timely understanding of the housing market performance will take a bit more time to become clear.
The signs of the expected loss of momentum come from the monthly change in average values, which rose by only 0.5% in May, the smallest monthly gain in eight months. Given the HPI methodology includes sales over a rolling three month period, and considering housing market activity went into hibernation through April and most of May, the latest HPI results are heavily skewed towards housing market conditions in March.
Today’s HPI release confirms that the market has lost some momentum, however it’s likely we won’t have a firm view on the trajectory of property values until sales volumes have picked up further over the coming months.
Over the next few months, property values look set for further weakness, as GDP falls and unemployment continues to rise.
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