There is much uncertainty about how long the pandemic will last and how it will alter both the tourism and the housing market.
Temporary border closures and restrictions on mobility have affected international demand for both rental and property purchases. Another question will be whether this decline translates into lower prices.
The confinement produced by the coronavirus already affects tourist rentals, causing owners to opt for long-term rentals in these times of uncertainty.
Moreover, the pandemic has spread asymmetrically: while in Europe it seems to be subsiding, in countries like the United States or Brazil it is in full virulence. These different speeds will be one more factor making a global return to normal difficulty.
Issues such as the possible availability of a vaccine or effective treatment for COVID-19, possible resurgence and how the economy evolves in the “new normal” will also have to be taken into account.
Construction paralysis, new buyer demands
Although it is still early to take stock, the fall in GDP, the increase in unemployment and the fall in disposable income all point to a fall in demand and a decline in prices in the real estate sector.
In addition, the bankruptcy and difficulties of builders and developers due to the crisis and the paralysis in economic activity caused by the pandemic may affect the market for newly-built housing.
The key, which no one knows right now, is when we will be able to return to a situation similar to the one we had before the appearance of COVID-19, with freedom of movement between countries and without having to avoid crowds.
What is clear is that, after the confinement, new trends in purchases and rentals are going to occur. It is foreseeable that the demand for housing on the outskirts of cities and with gardens, and for residences in the countryside, will increase.
If, in addition, teleworking becomes normalized as a result of this crisis, it is more likely that there will be a move from the usual city housing to less urban or rural environments.
New paradigms for the real estate sector
The real estate sector will have to look for new challenges and market niches. The expansion of the coronavirus, and its effects on social habits, impose new needs on buyers and tenants in search of housing.
On the other hand, due to the increase in online purchases, the pandemic has produced a great boom in the entire logistics sector, which will probably continue beyond the de-escalation. Hence, buildings and land for large distribution platforms may be an investment opportunity within this crisis.
It will also change the way of buying and selling houses and properties through agencies.
Real estate groups are looking to approach the client through all available channels (advertisements, billboards, telephone marketing, social networks…) and accompany them through all stages of the process of buying a home.
There is also a trend towards digitalization in this market (visits to properties through augmented reality, social networks…). Physical visits to properties will be accompanied by hygiene and prevention measures.
Even the design and construction of homes could change after the pandemic, trying to prioritize prevention, redefining common areas, and designing to minimize user contact with surfaces outside their home. In addition to the location of the home, natural light, gardens, teleworking spaces, and balconies and terraces will take on new prominence.