It would have been hard to imagine that a virus would affect half the world a few months ago, and that it would still cause incalculable financial losses in almost every sector of the economy. But we want to know how Covid-19 will affect the residential real estate industry, and what should homeowners take into consideration here onwards.
Due to the exceptional pandemic situation, the number of people talking and anticipating a drop in residential property prices is increasing from week to week.
There is no doubt that the current crisis is already having its impact on the residential real estate market in Portugal. Much because of current and expected economic uncertainties, some potential buyers are unwilling to burden themselves with a real estate investment. Housing credits will have more valuation requirements than before, and many sellers will wait for better times to sell their properties.
It is necessary to inform all players in the real estate market in Portugal that "the so-called housing bubble" does not exist. And that said bubble is not about to burst, nor will residential real estate suddenly lose its value.
But what is important to know is that the opposite may turn out to be the case!
The Coronavirus’ crisis has made many see how important it is for our home to be a space that is much more than just sleeping ground, it has become our castle. Staying in a private space of our own, with due social distancing and living conditions different from those that were important to us before this pandemic. People want to get back to having a beautiful, spacious, safe home that belongs to them. Demand for residential real estate and its prices are more likely to increase, given the emotional factors. So home owners can breathe a sigh of relief and be more relaxed at this time.
There have already been several international studies, such as a study in the German market by Hausgold that goes hand in hand with our thoughts, the german residential market like our own has been rising in price in recent years.
39% of all respondents confirm that the competence of real estate agents is particularly appreciated at this time. A regional real estate specialist can competently answer questions on the topics of selling and buying and thus settle client’s uncertainties and concerns.
The professional capacity of real estate agents at this stage of the race is crucial, and we at Casaibéria bet on the defense of prices since nothing has changed in the intention of potential buyers, nor in the costs of construction and acquisition of land before and after the health crisis of Covid-19.
We are therefore convinced that only good training and sensible response can help our customers, both buyers and sellers. We will not enter a race of discounts just to follow the opinion of said "experts" who live from crystal ball divination, and who lack a broader view of the subject and the national and international real estate industry.
I want to underline three ideas!
1- The real estate market will see a sharp drop in indicators of economic activity. The current recession resembles to a “football match break” in economic activity and should be interpreted and managed as such.
2- The fact that Portugal, from the point of view of attracting international investment, has added health security to its already very good and positive features, which will help us to leverage our recovery.
3- Portugal is still in fashion, and international investment is still interested in investing in our country, this will create new jobs. Employment that brings financial well-being and the one that leads to families to buying their own permanent residence again.
Text: Paulo Lopes