How can covid-19 redesign the contours of the real estate market?

There is one point on which everyone agrees, the year 2020 will no longer be a record year as was predicted in the first two months. After two consecutive record years, 2020 will see a sharp drop in the number of transactions. Spring is one of the most important seasons of the year: 15 to 25% of annual sales usually occur between mid-March and late April.   

After May 18, there may be a catch-up effect, but this delay cannot be absorbed. Completion of open sales will take several weeks and the summer may be quieter than usual, according to forecasts from notaries and lawyers. It will then be necessary to know what can be achieved and assess the real extent of the economic crisis, which will follow the health crisis.   

In any case, even the most optimistic observers do not expect a full reboot, but we are convinced that by the end of 2020 the Real Estate market will return to figures similar to those of the end of 2019.  

In a survey of real estate brokers operating in Portugal, the Portuguese Association of Real Estate Professionals and Companies (APEMIP) assessed the impact that COVID-19 had on this sector during the month of April.  

The results of this survey are indicative of the reality that real estate brokers have gone through in the last month. 50% of the companies surveyed totally suspended their activity and in 45.8% this suspension was partial.  

95.3% indicated a drop in turnover in April and a drop in demand of circa 92.5%. In addition, 62.7% of the companies revealed that the percentage of withdrawals by customers from ongoing transactions was 19.8%, even giving up on the purchase after signing the Promissory Contract of Sale and Purchase. "These figures show that activity was practically halted during the month of April. Soon official figures will be revealed that will confirm this reality: we were closed due to the national emergency lock-down plan, but we are aware and we are pleased with the effectiveness that the measures taken are having in slowing down the curve of the spread of the epidemic " says the President of APEMIP, Luís Lima, who is pleased with the reopening of the real estate mediation companies in this first phase of deconfinement.  

We, Casaiberia, were open via teleworking and telephone during this period, so we only had a fall in demand of 34.6% and we believe in a market recovery by the end of 2020, at the same level as in the last quarter of 2019.  

Text by: Paulo Lopes 

Picture: Jörg Hertle by Pixabay