Increased demand for second and tertiary residences
The pandemic is not just shaking up the housing market for primary residences. It also whets the appetite of buyers for vacation homes.
Low interest rates, savings accumulated over the past year and the increase in remote working are driving increased demand for additional residences, show the results of a Knight Frank survey, first reported by Bloomberg.
The Knight Frank Global Buyer Survey crystallized the changing attitudes of buyers towards home buying. According to the survey, 13% of those polled said their next real estate purchase would be a vacation or vacation home, behind major choices such as upgrading or downsizing their primary residence, but ahead of others. factors including location of children’s schools, job changes or relocation for tax purposes.
A third of those polled said they were more likely to buy a second home due to the pandemic, up from 26% last year.
This shift in demand has not yet been fully reflected in the market, at least not yet. According to Pacaso, the second home foreclosure rate, an indicator of selling activity, fell 26.6% over the summer from the previous frenzied summer.
However, the drop in transactions is not correlated with a drop in prices. In all but one of the major second home markets studied by Pacaso, there were double-digit price increases during the summer; Lee County, Florida was the only one to resist.
The Knight Frank survey says pent-up demand could be a big factor, as 22% of those polled said the pandemic had delayed their purchasing plans. And while demand for second homes has so far been largely driven by domestic buyers, Knight Frank predicts a second wave of activity as global travel restrictions are lifted. The United States ranked third on the list of preferred second home locations in the survey, behind the United Kingdom and Australia. Two-thirds of those polled said their purchasing decisions were influenced by the handling of the pandemic by the respective governments.
[Bloomberg] – Holden Walter Warner