The greatest TV series of all time is The West Wing, don’t even bother disputing this in the comments section. In the fictional White House, President Bartlet famously says “what’s next” whenever he wants to move the conversation on.
This week has seen the property industry trying to do exactly this.
Savills, Knight Frank, CBRE and every property commentator on Twitter have been making predictions. They want to move the conversation from “WTF” to “We know what’s happening and are in control”.
Of everything I’ve read (which is a lot, as I’m a sucker for punishment) Knight Frank were the most bullish....prices going up in Central London, farmland resilient, 4.5% growth in GDP next year and more. Read yesterday’s daily summary here.
https://www.knightfrank.co.uk/research/article/2020-04-07-your-morning-market-update-from-knight-frank-research-tuesday-7th-april
I get that a) research departments want to show their bosses that they are busy and b) these reports generate column inches, but come on.
We have no idea what the social, political or economic impact of this pandemic will be. People talk about the 1918 flu pandemic (heaven forbid this gets that bad) but it’s well documented that it was the “second wave” that caused the majority of deaths. We’re still on the upward part of the graph in the first wave here.
I’m not trying to be alarmist, just saying that all of these weighty “forecasts” should be taken with the Salar de Uyuni*. I do also understand that markets are about perception and that we should all be staying positive, but let’s just be realistic too. The French economy reduced by 6% in Q1 and will fall by a further 1.5% every 15 days of confinement (source Bank of France, 08/04/20).
Nobody knows what’s next, it’s way too early to tell. Hope for the best, plan for the worst.
On a micro scale, our company is seeing record visits to our website and we’re still getting high levels of enquiries by phone and email. The French property market has been hot these last two years (1.1m sales registered last year) and UK buyers have been rushing to “get in” before 31st December. The underlying demand is super strong. Our hope is that we’ll be out of lockdown soon and we’re putting plans in place to keep clients and agents safe when viewings recommence.
But, if unemployment soars, if clients can’t get mortgages, if vaccines take longer than thought to develop, if....as a business we need to have contingency plans in place for these scenario’s too.
So, what I’m saying is, use these forecasts as emergency loo roll until the time that we know the peak has passed and that we come out of lockdown. Hopefully we won’t have long to wait.
Then, we can think about moving the conversation along and start making semi-sensible forecasts.
Meanwhile, stay safe, be compassionate and support our front line workers.
*biggest salt flats in the world, as I discovered on Race Across the World last week.
