COVID-19’s impact on real estate
The pandemic has had a massive impact on financial markets and the economy across the world. Many investors, property owners, potential home buyers, and landlords are worried about how the pandemic will affect the real estate market. What will happen to property prices?
Photo by Morning Brew on Unsplash
Are property prices falling?
Currently, no unusual developments have been noted. It’s expected that while Coronavirus has led to changes in purchase conclusions, but on a long-term basis, it won’t reduce the demand for houses. For years, the demand for living space has exceeded supply in a lot of areas. This trend is unlikely to change significantly, as the reasons for excess demand have not gone away.
The high demand for housing is due to population growth and the continuing influx of people into metropolitan regions and medium-sized cities. This has driven up the number of properties for sale or for rent. So far, new construction has been unable to meet demand. This demand for living space is unlikely to fall even during the pandemic.
The reason for this is simple. Real estate does not lose its appeal for investors, even in a crisis like this. A home is still a stable investment. If you are worried about making an investment now, you can get help from a property adviser like Vail Williams.
What about commercial real estate?
Commercial real estate prices are also remaining stable. Individual sectors have been affected by the pandemic. The hotel, catering, and retail sectors are struggling due to the corona crisis, the demand for warehouses and storage spaces looks likely to grow. Due to long supply chains through several countries, more manufacturing companies could choose to set up their own warehouses, providing a boost to the market.
By contrast, a temporary downturn in the market for offices could cause a normalisation. So far, demand has been very high in some locations, making the market tense. A growing rate of vacancies could renew movement in the market. However, like the wider real estate markets, the office segment only reacts to macroeconomic changes, but with a time lag. In the short term, this could lead to fewer rental agreements, especially long-term ones, being concluded for now.
It’s important to remember that we are currently in a crisis. The most essential thing for everyone to do right now is to adhere to all the recommended protective and preventative measures. This will help th number of people who become ill stay within a range that the health service can copewith and respond to. If this happens, the economy will be better able to recover, and the market for commercial real estate will also recover. Currently, while many are understandably nervous, investing in real estate remains a safe investment.
Many have also worried about whether residential property can be sold safely, but thanks to modern, digital tools, it can. From virtual viewings to drone recordings of the area, there are lots of ways to safely market or view residential real estate, even during a pandemic.
