The disruption caused by the coronavirus will lead to unprecedented falls in housing market activity. We expect home sales will drop by 50% q/q in the second quarter, single-family housing starts will see the largest quarterly fall since records began in 1959 and house price growth will drop to -4% by the start of 2021. Pent-up demand from the spring buying season, and record low mortgage rates, will help activity recover in the second half of year, but we doubt all the drop in sales and starts will be made up. Rental growth will turn negative for the first time since the financial crisis, and a rise in yields will push total apartment returns down to around -5% by the end of the year.
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