Covid and real estate: the impacts
Even today, we have decided to dedicate our daily column to the Covid 19 emergency. In particular, we will focus on how the pandemic is radically changing the international economy but, above all, how it is affecting real estate.
Although the containment measures (in a different way) have however been extremely rapid and drastic, it remains an important fact. The size of this crisis will generate an impact like the great post World War II depression.
Reason why making predictions about the topic turns out to be risky. But let us now analyze the results available to us as much as possible.
How ? Comparing the current situation with the GFC, the 2007 Global Financial Crisis.
The global crisis started in the financial world with a very high level of debt. We are talking about a crisis that has generated profound uncertainties not only on potential real estate investors, but also among the creditors themselves. Fearful of the possibility of staying afloat in such a dramatic situation. The rapid propagation, however, caused a different impact in the various production sectors. In the real estate market, we have witnessed a slump in investment volumes.
This was followed by a significant reduction in their values. A very strong drop in demand, which obviously slowed down the speed of recovery of the national economy of the various countries. And although prices have plummeted, the myopic vision of the time did not allow a revival of immediate real estate. In fact, only in the last year has there been a renaissance in the real estate market also in less developed countries.
How is the current crisis presenting itself? We assume that we are not facing a financial crisis. But cheap. This materializes with the lack of possibility to make payments of the rent, for example, in the pre-established times. As we have already described in the previous guides, many states have decided to go into the matter. By analyzing the situation and helping, by lengthening the timing, those I know find themselves in a situation of payment deficit.
It's not just about a lack of transactions. But of a fear on the investor's side, to which must be added the difficulty of adhering to the contractual clauses also in the leasing contracts.
In addition to presenting itself as a complex situation, in this case it is not possible to understand in depth how long and how this reality will evolve. Precisely because both the purely financial aspect, but also the economic and psychological aspects closely related to the individual and potential investor, are at stake.
The turning point could be glimpsed at the end of the first lockdowns. When national economies start to awaken. And with them, the gradual return of citizens to previous life. Therefore, it is not possible to identify a certain date for the partial or total recovery of this global shock. What is certain is that we at Realigro will keep you constantly updated on our portal!
Although the containment measures (in a different way) have however been extremely rapid and drastic, it remains an important fact. The size of this crisis will generate an impact like the great post World War II depression.
Reason why making predictions about the topic turns out to be risky. But let us now analyze the results available to us as much as possible.
How ? Comparing the current situation with the GFC, the 2007 Global Financial Crisis.
The global crisis started in the financial world with a very high level of debt. We are talking about a crisis that has generated profound uncertainties not only on potential real estate investors, but also among the creditors themselves. Fearful of the possibility of staying afloat in such a dramatic situation. The rapid propagation, however, caused a different impact in the various production sectors. In the real estate market, we have witnessed a slump in investment volumes.
This was followed by a significant reduction in their values. A very strong drop in demand, which obviously slowed down the speed of recovery of the national economy of the various countries. And although prices have plummeted, the myopic vision of the time did not allow a revival of immediate real estate. In fact, only in the last year has there been a renaissance in the real estate market also in less developed countries.
How is the current crisis presenting itself? We assume that we are not facing a financial crisis. But cheap. This materializes with the lack of possibility to make payments of the rent, for example, in the pre-established times. As we have already described in the previous guides, many states have decided to go into the matter. By analyzing the situation and helping, by lengthening the timing, those I know find themselves in a situation of payment deficit.
It's not just about a lack of transactions. But of a fear on the investor's side, to which must be added the difficulty of adhering to the contractual clauses also in the leasing contracts.
In addition to presenting itself as a complex situation, in this case it is not possible to understand in depth how long and how this reality will evolve. Precisely because both the purely financial aspect, but also the economic and psychological aspects closely related to the individual and potential investor, are at stake.
The turning point could be glimpsed at the end of the first lockdowns. When national economies start to awaken. And with them, the gradual return of citizens to previous life. Therefore, it is not possible to identify a certain date for the partial or total recovery of this global shock. What is certain is that we at Realigro will keep you constantly updated on our portal!
