To speculate usefully about the effects of the COVID-19 pandemic on Britain's housing markets one needs a clear analytical understanding of how our housing markets work and what forces cause them to change. Given the extreme uncertainty about the impact and evolution of the COVID-19 pandemic, anything in this blog is in some sense speculation, but we hope informed speculation. A recent academic paper analysing the impacts on house prices and rents of historic epidemics in Amsterdam and Paris found only relatively short lived and localised reductions in house prices and smaller effects on rents than on prices. While useful, we are cautious about trying to draw direct lessons from such historic examples: not least because the extent of lockdown and economic disruption now is an order of magnitude greater. COVID-19 is a true pandemic, affecting the whole interdependent world economy at the same time: it is not localised to Amsterdam, New York or Wuhan. Moreover, beyond its intrinsically lower fatality rate, modern medical understanding about the spread of disease and societal emphasis on saving lives are likely to mean much lower death rates from COVID-19 than from the Black Death or the cholera epidemic in 19th Century Paris: but disproportionately greater economic impact.

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17 April 2020

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CEP Urban and Spatial Programme

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http://spatial-economics.blogspot.com/2020/04/covid-19-crashing-economy-so-what-will.html

This Blog is published under the centre's Urban programme.