Global property experts Savills has assessed the initial impact of Covid-19 on transactional and occupier property markets around the world. 
Photo: James White
Global property experts Savills has assessed the initial impact of Covid-19 on transactional and occupier property markets around the world. Photo: James White

Covid-19 has 29% negative impact on global transactional and occupier property markets

By BR Correspondent Time of article published Apr 10, 2020

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DURBAN - In its first of a series of global sentiment surveys, global property experts Savills has assessed the initial impact of Covid-19 on transactional and occupier property markets around the world. 

According to the surveys, 67 percent of countries currently reporting a moderate negative impact, and 29 percent citing a severely negative impact.

The Savills Global Market Sentiment Survey is intended to provide a snapshot of the market conditions across 24 global country markets* from 27 - 31 March 2020 based on the views of Savills head of research in each geography.

The key findings of this edition were as follows:

Capital markets

Falls in transaction volumes were reported across 62 percent of all real estate sectors globally. The sharpest falls in activity were seen in retail, with activity reported to be down in 82 percent of the countries surveyed, and hotels where transaction activity fell in 84 percent of countries.

Capital values

The impact on capital values is yet to be seen at the same scale, with Savills researchers seeing pricing remaining firm in 51 percent of all sectors globally. More countries reported office, logistics and residential values as unchanged than they did falling. Retail, a sector already weakened due to structural changes prior to Covid-19, has seen falls in capital values compounded: 82 percent of markets reported drops. 


The global debt picture is mixed. European and North American countries in particular report of tightening of availability and worse terms, most notably in the US and UK. Availability and terms remain favourable in emerging markets such as Indonesia, the Czech Republic, Taiwan and the Middle East.

Occupier Demand

While many of companies across the globe are working from home, office space demand hasn’t been severely impacted. A moderate fall in demand was reported by 70 percent of countries and just 13 percent stated a sharp fall. Demand in the residential sectors has also fallen moderately. 

Rental Values

The impact of this change in demand is not yet fully realised in rental values which were reported unchanged in 51 percent of countries/sectors. The exceptions are once again retail and hotels where 30 percent and 63 percent of countries reported rental values to have fallen sharply, respectively. Favourable terms for retail tenants were reported in 86 percent of countries. Just over 50 percent of countries reported favourable terms for office tenants, and 23 percent in the logistics sector.

Paul Tostevin, director in Savills World research team, said, "In the short term we expect to see capital values and rents follow the falls seen in transaction activity and occupier demand. Covid-19 remains a near term challenge, but certain trends, such as the shift to online retail and changing working habits may be accelerated. This could have long term implications for markets as a whole". 

South African residential property market

Dr Andrew Golding, chief executive of the Pam Golding Property group, which is in association with Savills said, "Against the backdrop of a local economy which was already in recession it is theoretically still possible to transact during this lockdown period and our agents are all operating remotely – online and via telephone". 

However, from a seller and buyer perspective, and as far as the real estate industry is concerned, the fact that the processing of concluded but not yet registered sales transactions are being delayed due to the Deeds Office being closed during the lockdown has extremely negative and serious economic ramifications. Furthermore, although transactions underway can still be at least partially processed online, the fact is the market is currently, and understandably, more or less in limbo until the lockdown is lifted and transactions can be processed via the Deeds Office. 

As far as where the market will be post this crisis is really anyone’s guess, but the hope is that there will be pent-up demand from transactions that were already in progress, and there is also likely to  significant financial distress post lockdown and this could give rise to a variety of scenarios including the repricing of certain markets, different supply and demand scenarios in different areas and suburbs around the country and added to this the likelihood of a completely different way of viewing properties and transacting online. 


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