María José Pérez-BarcoSEGUIRMADRID Updated: Save Send news by mail electrónicoTu name *
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Stop total in the real estate sector, as in many other areas of the economy. But it comes at a time when the housing market was already registering a slowdown and a cooling of the activity from 2019, as warned by several indicators. Something that has become more apparent in the first quarter of 2020, before the crisis of the Covid-19.
The past year as it sold fewer flats and the rise in prices moderated. Even the income of the rentals appeared to be contained, except in areas that are highly stressed from Madrid and Barcelona. The question now is whether the situation will return to your channel after overcoming the healthcare crisis or it will open a new paradigm in the real estate market. For now, there is optimism that the sector will succeed. Will recover in the last quarter of this year, according to the most optimistic forecasts, or in any case along, 2021, at the latest. Although no one has any certainty.
According to the Yearbook 2019 of the Statistical Register of real Estate, published by the College of Registrars, the past year since it was purchased less floors. For the first time in five years, the number of sales of housing stopped their growth, declining a -2,5% with respect to 2018. Even so, they were 503.875 operations. Yes, the decline had a negative impact on everything in the used housing, with 413.185 sales, a 3.1% less. For its part, the new housing experienced a slight rise of 0.6% (in total, 90.690). How will the trend after the Covid-19 ? “We’re not going to go back to the same situation before the outbreak,” says Ferran Font, director of Studies pisos.com. “We have on the table hundreds of thousands of ERTES in enterprises —continued—. The direct consequence will be the lack of liquidity in the families, who consume less. And will be afraid to make big decisions that dragged for several years, as the purchase of a home”.
uncertainty retract the housing supply in the market and tensionará prices
Now the sales have plummeted. In confinement it is impossible to sell real estate, especially in the second hand market as in the majority of cases are transactions between private parties. You can not visit property, to make displacements to do this, meet with the buyer, some of the activities, before a notary, nor can you make… “which is found in processes of active purchasing, if you have been dismissed or have suffered a FATE, they are going to stop doing it, or will postpone the decision or will take advantage to negotiate the price,” predicts Juan José Aguilera, director of Institutional Relations at Official College of Estate Agents (Coapi) in Barcelona.
The alarm will go. And then there will be faced with a break through the fear and the uncertainty. For this reason, the property agents expect “a reduction in the number of sales. This year we estimate that we will close with 475.000 operations That implies a reduction of between 15% and 20%,” says Aguilera.
The fall in demand will have a direct impact on prices, which will drop “at around 8% in used housing”, calculated by Aguilera. Already this month of February pisos.com he’d detected a drop of 1.25% in the prices of second-hand housing with respect to December 2019. In addition, we can give also another phenomenon: lack of liquidity, some owners need to sell with rebates to get a quick sale of their property.
This situation seems to be that it will affect less to the new work. In this case we can produce postponements to the time of delivering the promotions. “The slowdown will have a major effect on the finished works and will add less product to the market. The danger of the new work is the destruction of the industrial fabric, there is formed by small and medium businesses. There are increasingly fewer qualified professionals to work in construction. This destruction of companies can cause paralysis and be more complicated reactivation,” warns Ferran Font.
“The slowdown will have a significant effect inthe finished works and there will be less product”
Where there is already a large uncertainty in the rental market. The increase of rents of previous years higher than 10% already appeared to deflate. “The spike in the price of rent in the areas most pressured by the demand was already starting to show signs of exhaustion,” says Ferran Font. However, since it is totally unpredictable what can happen in this market as a result of the consequences that can bring in the Royal Decree-law, approved by the Government last march 31, to give aid to people who are not able to pay their landlords for being in situation of vulnerability by the coronavirus .
The standard (in addition to suspend evictions during the next six months) suggests that in the case of small landlords (with less than ten properties), the tenants vulnerable to be able to negotiate a deferment of the rent with their landlord. Not to reach an agreement, they may request a credit finalist, without cost and with the endorsement of the State, through the Official Credit Institute (ICO), to tackle up to six months of rent, which is then returned in a period of ten years as a maximum and no interest. In situations with increased vulnerability, the law provides for even the possibility of granting direct subsidies to the rental.
Many people understand that these measures are left in a situation of helplessness to the small owner, who precisely are the 95% of the landlords in our country.
“Many are people who have one or two floors on rent to complete your pension, to pay for the residence of their parents or to assist in the payment of a mortgage,” explained José Ramón Left-handed, general director of the Agency’s Negotiating Rental (ANA).
ANA has been detected in this month of April, unpaid, and “the tenant has not spoken with the owner, or with ANA, nor has she requested help,” says Lefty. Also the real estate agents claim to be receiving queries from “tenants who are not in a situation of vulnerability but apply to negotiate the rental price and to push the low”.
And is that the scenarios can be very diverse. “And you always have to lose the particular owner,” she complains. is “The support via the ICO —explains— will arrive late to the owners; the tenants can receive such assistance and not for the rent, which the landlord will not receive income… And if the tenant decides to not pay and not ask for any help, will be covered legally for six months without any consequences, since you can’t produce hoists court or evictions, however the owner shall be without charge to the rent.” Or you can even give the event that the tenant chooses to continue the call for a strike of rents that run through the social networks.
A situation that can retract the supply of housing in the rental market, and tightening again the prices, as it believes Aguilera. “The decrease in income —explains—, the moratoriums, the stoppage of evictions, and generates a lot of fear in homeowners. If they see the slightest symptom of danger they close their floors and not out on the market.”
The second residence, to pique
The second home will be another big hit by the crisis of the Covid-19. “It will feel a lot”, considered Ramon Riera, president of Fiabci Spain and Europe. “To not be that the foreigner is willing to buy electronically, and without physically see the home. Until you have total mobility and recover the tourism will not come foreign purchases. And that represents losing the 13% of the market transactions that are the international”, points. Nor will domestic demand be able to reactivate this market. “Except that there are great opportunities, the Spanish didn’t buy a second home on the beach or in the mountains,” he says.
What do the investment funds is another mystery. Ferran Font believes that “the volatility of the stock market can show investors that the brick is an investment that may not give as much profitability as in the past few years but will continue offering it and also give you security”.
“All dependenderá of the profitability, to the extent that lower prices will be attractive to go shopping,” says Riera.