The impact of the crisis caused by the pandemic has also been seen in house prices, due to the stoppage and uncertainty it is expected that in 2020, prices will fall 4% year-on-year. The second wave and the end of government stimuli will cause a 4.6% drop in 2021.
2021 is planned with a drop in the price of housing, “this is what a majority of real estate professionals believe: up to 37% of them foresee that the consequences of the coronavirus crisis will last more than a year and another 30% predict between 6 months and 1 year of difficulties in their business. Only 13% bet on a horizon of less than 6 months “, they report from the Fotocasa portal.
This cheaper housing will consist of “a pause in the price rise”, they point out from Moody’s in the presentation of the latest report on the real estate sector of the credit rating agency.
Prices will be reduced due to the impact of the coronavirus crisis, which will be accentuated in the countries most dedicated to the tourism sector, such as those in the south in Europe. Spain, Italy, Portugal and part of the French market, which will be one of the major European losers. In the rest of the continent, Moody’s predicts that in United Kingdom the pandemic factor is going to be accentuated by Brexit, while for Germany and the Nordic countries a much smaller impact is expected.
What will cause in the real estate sector after the coronavirus a lower demand, a drop in transactions and few certainties in the purchase and rental prices
BET ON THE SECOND HAND
The price of second-hand housing fell by 2.4% in the third quarter of 2020, as reported by the Real Estate Index of the Fotocasa portal, with respect to the prices of the previous year in Spain. Professionals believe that it will be a trend that will continue to continue for at least six more months, but in a moderate way: 56% of them believe that it will fall slightly and another 14% predict a greater fall.
The size of the company will be something to take into account, since the price forecasts depend on how it is. Professionals with a smaller portfolio of properties believe that around 88% of them will drop very significantly, while medium portfolios reduce it around 84% and by 81% for large ones with more than 75 properties, as they have more capacity .
SMALL COMPANIES LARGE AFFECTED
The pandemic has hit the small real estate agencies more severely while the large ones maintain much more optimistic forecasts. Among those that have less than 25 properties in their portfolio, their activity has been reduced by around 86%, while agencies with a greater volume have seen activity reduced by 78%, with a difference in the fall within the own sector close to 10%.