Repricing and real estate: what will happen
After many countries have managed to cope with the Covid crisis, what affects both owners and potential investors is the price. How will the values relating to real estate vary? Will the price review involve all sectors or part of real estate?
To answer these questions, we decided to create a small guide, to give an overview (forecast) about what will await us in the coming months.
We assume that, as far as lease agreements are concerned, especially in tourist areas, a downward war has started. War, however, still provides for high prices. Keeping the price bar high is the need (in many states imposed by law) to totally sanitize the environment, through the use of really expensive equipment and methods. But not everyone thinks the same way. According to the forecasts of the main economists, there are three scenarios that could characterize our near future. All by virtue (obviously) of the trend of the contagion curve.
In a first instance, a normalization is assumed, and with it the progressive reduction of the price spread. In the other two, however, there is fear of a return to the so-called phase one (therefore forced isolation), with the consequent blockage of the entire economic system. Therefore, the real estate market is also included. If the return wave is bearable and manageable, hopefully a gradual adjustment, with prices still lower than in the pre-Covid period. A real devaluation of the properties on the market, which leaves owners but also investors perplexed.
So is it all about repricing? Hopefully not, but talking about absolute certainty at this stage would be risky. When will it be possible to talk about a real restart?
According to experts, after the summer. Although the real estate market is still active, so much so that in many countries it seems that it has never stopped, in general the blockade persists. It is necessary to make a budget not only by taking into consideration the value of the property or the cost of living of a given nation. But it is necessary to calibrate everything according to the health situation. For example, in Spain, where the cost of living is still in line with the European average, there is a risk of delaying the return to normal, due to the health collapse. Reason why, in countries like this, we can expect either an excessive swelling of prices (to drive the entire economy) or, on the other hand, a devaluation of real estate.
However, what bodes well is that, in an overall average, the liquidity in circulation (despite the uncertainty) remains high. Like the interest for (younger) investors to appear in the real estate world. The sector least affected in terms of repricing will be that of rents, but for sales contracts ... everything is to be expected!
To answer these questions, we decided to create a small guide, to give an overview (forecast) about what will await us in the coming months.
We assume that, as far as lease agreements are concerned, especially in tourist areas, a downward war has started. War, however, still provides for high prices. Keeping the price bar high is the need (in many states imposed by law) to totally sanitize the environment, through the use of really expensive equipment and methods. But not everyone thinks the same way. According to the forecasts of the main economists, there are three scenarios that could characterize our near future. All by virtue (obviously) of the trend of the contagion curve.
In a first instance, a normalization is assumed, and with it the progressive reduction of the price spread. In the other two, however, there is fear of a return to the so-called phase one (therefore forced isolation), with the consequent blockage of the entire economic system. Therefore, the real estate market is also included. If the return wave is bearable and manageable, hopefully a gradual adjustment, with prices still lower than in the pre-Covid period. A real devaluation of the properties on the market, which leaves owners but also investors perplexed.
So is it all about repricing? Hopefully not, but talking about absolute certainty at this stage would be risky. When will it be possible to talk about a real restart?
According to experts, after the summer. Although the real estate market is still active, so much so that in many countries it seems that it has never stopped, in general the blockade persists. It is necessary to make a budget not only by taking into consideration the value of the property or the cost of living of a given nation. But it is necessary to calibrate everything according to the health situation. For example, in Spain, where the cost of living is still in line with the European average, there is a risk of delaying the return to normal, due to the health collapse. Reason why, in countries like this, we can expect either an excessive swelling of prices (to drive the entire economy) or, on the other hand, a devaluation of real estate.
However, what bodes well is that, in an overall average, the liquidity in circulation (despite the uncertainty) remains high. Like the interest for (younger) investors to appear in the real estate world. The sector least affected in terms of repricing will be that of rents, but for sales contracts ... everything is to be expected!
