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The great uncertainty and insecurity due to the crisis of the COVID-19 pandemic presents positive and negative aspects regarding the Spanish real estate market. Questions and doubts arise such as “How will the coronavirus pandemic affect property prices? What if you want or need to sell? Will prices go down?” The reality is that there will be more opportunities to invest on properties during COVID-19.
Everything points to a decrease in properties prices, there will be fewer buyers, fewer investors, and probably more sellers. In this case, sellers will suffer more than buyers due to the necessity of money at these times. The main attractions and places in the city or town will attract money. Probably some real estate agencies will disappear. There will be an opportunity for those buyers who look beyond the current crisis and there will be more investors. Buyers and sellers will have to stick to the new situation.
In just a few days, real estate activity has dropped to almost 0%. This has never happened before. We can expect this activity to resume once the health crisis has improved, but it will take a while.
The values and references of the real estate market have changed. It is crucial to understand how things have changed and must adapt your strategy to accommodate those changes. It is imperative to drop your old benchmarks and reevaluate the market using more up-to-date information.
Some sellers will wait and see how everything goes, and others may simply withdraw their properties from the market if they are in no hurry to convert fixed assets into liquidity. This will also reduce the volume of transactions.
However, uncertainty and an economic recession install numerous homeowners and sellers, and the parameters that adjust their price expectations to reality. While many buyers or investors can wait, those who cannot (families, investors, or entrepreneurs who need short-term money) may have to sell non-essential assets, such as a second home or rental properties.
Moreover, European Central Bank’s (ECB) and other central banks’ monetary policy suggests that the low interest rate environment is likely to continue for longer. In addition, many governments have activated further fiscal easing. The combination of the two should support many economies through what could otherwise be a much stronger blow to economic growth.
So yes, there will be opportunities, but they will not continue forever and maybe not even in 2021.
Today there are many moving elements and things can change, focus on what is important to you and plan for it, so that you are prepared to act with an informed mind and a realistic approach.
