It is now clear that the Coronavirus will control life and the economy in the coming months. The consequences will also be noticeable during the main sales period of the Spanish housing market.
Following the property recession of 2008/2010 the property market was recovering well and returning to a reasonably healthy situation. However the Covid-19 lockdowns throughout the World, Europe and in particular in Spain present a bigger threat than ever.
In Spain the situation of the Coronavirus has become extremely serious. Spain is currently one of the most affected Countries in the World. This has forced the Spanish government to impose a national blockade and lockdown. This is expected to have major consequences for the Spanish housing market in the next three months and beyond.
A state of emergency applies in Spain, with people having to stay at home and isolate themselves. Meanwhile, the entire country is placed in lockdown. All tourist and recreation companies are closed during this period. This will disrupt the Spanish economy, which is highly dependent on tourism and services. But this also has dire consequences for the Spanish housing market. The market for second homes in particular is highly dependent on tourism. This is expected to paralise sales activities for at least three months and most probably for much longer. Experts predict that a property recession could affect Spain and the rest of Europe for the next one to two years.
Normally, the first six months of the year are always the best for holiday home sales. More than 60% of sales take place in the first half, especially in the second quarter from April to June. European travel is going to be significantly disrupted by the Coronavirus for the next three to six months. This can have a significant negative effect on the sale of Spanish houses. Potential buyers are not able to visit Spain and so many will cancel their purchase plans for this year. If so, the effects of the Coronavirus will hit the Spanish property market at an important time - namely in a period when both local and foreign demand for houses in Spain was increasing.
Consumer confidence is always an important key to the health of the real estate market. Falling sales do not increase this confidence. Coronavirus is expected to reduce sales of Spanish properties in 2020.
The Coronavirus shock is likely to create an opportunity for buyers when the dust settles. But of course it is bad news for sellers. Sellers who are not in a rush to sell, could consider taking their property off the market until buyers and confidence are back. However in such times and in order to survive the crisis many sellers will still have to sell, especially the owners of second homes or holiday homes.
However, this crisis will also allow people in lockdown, confinement, Quarantine or working from home to research and plan for their future purchase. The Internet will provide a platform to select properties of interest and plan for a future viewing visit.
Spain is in lockdown and everything, except supermarkets, pharmacies and other essential suppliers and businesses are closed. People are not allowed to leave their homes, except to go to work, buyessential supplies, or for exceptional reasons. These measures have been taken in an attempt to slow down the spread of the Coronavirus. The measures apply to everyone in Spain, regardless of the region. The police are also empowered to stop and interrogate people who drive on public roads, who leave their homes or break the lockdown laws in any way. These measures are also being implemented throughout most of Europe and the rest of the World.
Here at Simply Andalucia we do hope that as few of you as possible suffer in any way and we look forward to a return to a normal lifestyle for you all.
We are here to help you in any way that you feel we can – please don´t hesitate in contacting us.