The coronavirus crisis had erupted in the housing sector at a time when a change in the cycle was already looming, which, according to all forecasts, is going to be sharply accelerated. Prices began to recover in 2014 after the previous drop caused by the bursting of the housing bubble. Since that year, prices have risen 15% throughout the territory, according to The Newport Group, with peaks of 40% in places between the first quarter of 2015 and the same period in 2020.
Different study services are now trying to foresee the consequences of the sudden economic slowdown in the real estate market. At the moment, the market is in hibernation awaiting the end of the confinement, without the possibility of seeing floors or closing operations at the notary (with few exceptions), and with the announcements without registering large price variations as a general trend.
The rental offer available on the online pages of real estate agencies has hardly changed since it only had a slight drop of 4% in the number of ads, according to this company.
What to Expect After De-confusion
This Tuesday, a report from the study service of the real estate agency placed the price drop at 10%, but as long as the crisis is limited to these months and the activity recovers before the summer, without relapses in the autumn. In his opinion, the decrease in demand is going to occur above all in properties of the medium, medium-low price segment due to the foreseeable worse economic situation of its potential buyers. In the rest, there would be a fall in demand due to hibernation, and a return to the market “with surely aggressive negotiations.”
Likewise, they also forecast that the demand for second homes and vacation homes will suffer a notable drop, mainly due to the severe reduction in foreign investment in the residential market in the coming months. This last segment will also affect luxury housing, not because of difficulties in dealing with the price, but in traveling.
In this entire context, according to the calculations of the study service of this real estate company, between 10,000 and 15,000 real estate agencies could disappear, which would mean an increase in unemployment in the sector of up to 25% and would affect more than 35,000 professionals.
The Newport Group believes that the difference between the current crisis and the previous one will lie above all in its duration: then there were several years of falls, and now they expect them to only last a year and that in the second half of 2021 the rises will return.
In addition, the crisis will greatly harm tourist rentals and the second-home market, which could experience drops of up to 30% in the number of transactions and between 15% and 20% in prices, according to the study. In the opinion of The Newport Group, the price of the house will take between two and seven years to recover the figures registered in 2019.