The positive effects on the Spanish housing market of the coronavirus crisis!

 

It's always good to try and find the positive ones during the current coronavirus crisis in Spain. This is confirmed by the housing market and tries to gain a better understanding of the health crisis and the economic blow expected from COVID-19. Despite the paralysis of sales operations and experts expecting to see a recovery at least before the end of the year in the housing market, the sector is optimistic and relies on the pandemic to bring about some positive changes.  real estate in qatar

This is the point of view of Comprarcasa, a network of 150 immobilization agencies in Spain and Portugal which in its two decades of business has scales over 120,000 transactions. The company in a recent study summarized the 'good habits,' which could remain in the real estate market after the crisis. This includes the market explosion of technological devices, buyer empowerment, low interest rates and the industry's growing professionalism.

Let us look at these potential good habits that could emerge from the crisis:

 

Price drop and authorization of the buyer

Interest rates continue to be low

A refuge for investment in times of uncertainty

Technological tools explosion

Many vacation rentals will change their use

Professional rental management will keep growing

Only the best survives

delay in the rental of sector criticized measures

The need to rethink urban planning and architecture

Price drop and authorization of the buyer

 

The network considers it inevitable that the house prices will drop according to the theory of Century 21. This crisis will force many people to lower the price of their homes, particularly if they wish to close the deal as soon as possible, to adapt to the new circumstances.

The market is already envisaging a fall of 10-15% in prices, but all will depend on the depth and duration of this crisis, but what is clear is, 'we face months in which buyers have their say again.'

Interest rates continue to be low

Another great news is that central banks around the world maintain accommodating financial conditions in order to deal with the crisis, as long as there is no inflation pressure. Therefore, eurozone interest rates could stay at historically low current rates of 0.0 percent after 2022. As a result, family and business interest rates on credit will remain low and the 12-month Euribor, reference indicator for most mortgages in Spain, will not sharply increase.

"This cheapening of mortgages and the decline in financial markets lead us to believe that the sector will continue to be a key asset for investors, and that the impact on the medium and high segments of the property will be short-lived," Comprarcasa's experts added.

A refuge for investment in times of uncertainty

The study reminds us that, as has happened in the past, the recovery in this sector is always very intense once the most critical moments are over. The experts also add that the volatility that is affecting the financial markets, combined with the predictions of an extended era of ultra low interest rates, leads them to believe that "the real estate sector remains an interesting investment destination."

Technological tools explosion

This containment period will also boost the industry's commitment to technology and new digital tools. "Many immobilization professionals use this hiatus to train staff, update their tools and strengthen customer relations through technology." For example, both virtual home tours and contractual formalization or payment of deposits are on the rise digitally.

Many vacation rentals will change their use

In view of the likely setback in the tourism sector, the supply of long term rental flats on the market will also change from the holiday rental market to the traditional market. This increase will be accompanied by the network stresses "natural downward price adjustment."

Professional rental management will keep growing

Comprarcasa believes that the government-approved package of measures to assist tenants who are large and small, "Will be of great assistance to vulnerable tenants, without a doubt. Moreover, large holders (who own a large number of properties) have provided their own contingency plans to the most vulnerable in these challenging times. "This fact leads us to believe that professional asset management enables a more effective response than private owners and that after that crisis, this trend would be further consolidated," insists the study.

Only the best survives

As is the case with other industries, companies that are best prepared to recover best from the economic blow while the weakest are at risk of disappearing. "Immobilizers, ongoing training, network operation, complementary services, financial instruments and brand strength will make the difference between survival or not," says the study.

delay in the rental of sector criticized measures

To date, the spread of the epidemic has left one of the government's main measures in the air: rent control. Despite the planned presentation of the rental price index in the first quarter of 2020, the Ministry of Transport, mobility and Urban Agenda (Mitma, formerly known as Fomento), the measure was postponed. Minister José Luis Ábalos' goal is also postponed to present to Congress a "initiative to control rental prices in areas where there have been exorbitant rises."

Both actions have been criticized by the opposition and by the immobilization market. Indeed, national and international organizations, economic experts and the sector have warned for a long time that establishing rent controls could be counterproductive for the housing rental market itself.

The need to rethink urban planning and architecture

Finally, the study highlights that "It is quite likely that the traces left by these weeks of confinement, with the "balcony" phenomenon and neighborhood coexistence, lead to a profound reflection of the houses that are to be built in the very near future.