While we are facing a new stage of lockdown exit, questions are piling up about the impact of the Covid-19 on the real estate sector. You may be now wondering what the consequences and recovery will look like and what the keys are for a successful way to face the challenges. There will be a difficult time over the next few months but also an immense learning opportunity.
From Inmo Andalucía, we want to contribute our bit to guide and accompany you on this journey ahead. This is why this last week we organized a webinar panel discussion on the impact of Covid-19 on the real estate sector in Marbella and Estepona. We had the chance to hear from two great professionals specialized in this field: Mr. Walid Moussa the World President of FIABCI 2019-2020, the International Real Estate Federation, as well as the Founding President of FIABCI Arabic Countries and the President of The Real Estate Syndicate of Lebanon (REAL), and Mr. Ignacio Oslé General Director of Taylor Wimpey in Andalusia, a multinational real estate developer listed on the stock exchange, with its headquarters in the United Kingdom specialized in second residences with 140.000 handed houses a year, 380 in Spain and 150 in the Costa del Sol.
Mr. Walid Moussa and Mr. Ignacio Oslé shared with you their vision and analysis of the real estate market in the short and medium term, and gave you some insights on how to face your new reality from now on. Some of the big questions that unavoidably arose during the debate were the Prospects of the international real estate market, particularly in the Northern European countries and the Middle East, the main source of homebuyers in Costa del Sol, and the valuation of the Costa del Sol as a safe destination compared with Paris, Monaco or London…
For Mr. Walid Moussa, there is no one truth. Disease has brought uncertainty and fear… people won’t be able to travel to Spain and would hardly come to buy till a safe vaccine against coronavirus is developed.
However, the outlook of Mr. Walid Moussa is optimistic since the Costa del Sol remains as a safe product for investors. During the pandemic outbreak, the concept of “Home” has become increasingly important. People realized how crucial is to have a safe and comfortable house with access to nature in case more new pandemics come as scientists expect. The virus may change completely the concept of our next house.
Architects and designers expect the pandemic to affect house design long after the lockdowns are over. “The idea of having a second home and traveling are two concepts that will pop-up strongly, and we will all want to have our space”, said Mr. Walid Moussa. Homebuyers will likely start to come to Spain not only for holidays on a regular basis but to live here all year around, he predicted.
Addressing real estate agents, Mr. Walid Moussa emphasized on the need of being flexible and adapt our products to local clients and investors as an alternative to the international client. Mr. Ignacio Oslé, on his part, believes that after spending so much time indoors, Spanish clients will hopefully start considering buying houses near the beach and golf courses, when circumstances allow and depending on their purchasing power, and he insists on elaborating marketing strategies in the medium and long term.
“Maybe this isn’t the time of closing sales deals, but it is for “planting”, Mr. Ignacio Added. “We should be closer to the client, he advices, enter his house, to know his needs and be his friend. Digital transformation made it easier than ever. Everything have to be more personal and well worked previously”.
For Mr. Ignacio Oslé, this crisis is not financial, and very different from the financial and real estate crisis of 2008. There is no reason to expect the same drop in prices. Both the real estate and the financial markets are healthier, the owner’s debt situation is better, because they have savings. People with purchase power, he points, are investing in mutual funds and gold that can’t enjoy, but if they buy a house, they may definitely enjoy it.
“When the Coronavirus pandemic ends, he added, the excellent life quality of the Costa del Sol will once again attract buyers who will really come to appreciate living all year around on the Costa del Sol and not just come on vacation; with the help of the digital tools and when working from home become the norm”.
Regarding the prices, the two speakers concurred that the market determines the prices depending on the housing supply and demand curve. In our target market, since the international client can’t currently fly to Spain, the buyer who really needs to sell has to adapt to the current market.
“The reality of the market downturn-said Mr. Walid Moussa- and uncertainty will prompt sellers and developers to adjust their price expectations”. Mr. Oslé, as a developer agreed and said they are open to embrace a negotiation and adapt their sales prices to the new circumstances. In my opinion, the discounts expected to be done are estimated at between 5% and 25%, depending on the location, and quality of the property, but I believe we have to wait for the first sales transactions to draw conclusions about this.
Specialist in Luxury Properties in Puerto Banus- Estepona
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