COVID-19 has no cure and is disrupting global business. How would the real estate fare during this crisis?

The world has come to a grinding halt with COVID-19, an infectious disease that causes respiratory distress.

Yes, we have been caught unawares by Covid-19. But how and where did it take birth? Nobody knows for sure. The first reported cases of infection is from Wuhan in China on 27 December 27.

Since then, the world has transformed dramatically. Business is disrupted and the stock markets have crashed touching rock-bottom globally. Fear and panic is taking its toll on the global business and to make matters worse lock-downs and possibilities of lay-offs is undermining the confidence of public

Is recession under way? Only time can tell how we recover from this crisis. Meanwhile, it might be foresightful exercise to look into its impact on real estate.

It’s early to come to a solid conclusion on how the virus might affect the real estate. However, compared to stock markets with wide fluctuations, real estate has more solid fundamentals that takes time to get affected.

It’s early to come to a solid conclusion on how the virus might affect the real estate. However, compared to stock markets with wide fluctuations, real estate has more solid fundamentals that takes time to get affected.

Completing a property transaction is difficult in today’s climate, as all non-essential activities are suspended in most countries. This is a definite dampener for the real estate market. But this being a short-term crisis investor confidence in the real estate sector still continues unabated.

The good thing is that interest rates are falling in most major real estate pockets. However, the fear of unemployment might discourage the end consumers from committing to monthly EMIs at the moment. They might postpone their buying decisions for a while till the global economy shows a better clarity

Let’s see the impact of COVID-19 in the major pockets of the world.

• The real estate prices have stalled in China and the sales have also plunged. There have been no transactions in the 19 major cities

• Many brokers in New York have shifted to a virtual tour of properties. The sales have fallen, with many people postponing their buying decisions for a while. Even the real estate listings have shown a decline

  London real estate segment is slowing down and there has been a significant drop in the new home listings. The viewings have also come down and there has been a drastic drop in the nationwide sales. However, the deals that had already materialized are still getting executed.

• The Australian property market has shown no slack because of COVID-19. It’s business as usual at Sydney. Most agents in Melbourne are switching to virtual tours and provide necessities like hand sanitizers, disinfectants, and rubber gloves to the customers during a physical property inspection.

• In Ontario, the realtors are shifting to online methods and digital technology to ensure business continuity. A drop in the sales is expected in the market in the coming few months. The lower interest rate is great news for the home buyers but measures like social distancing could put a hold on the sales for a while. Experts predict a positive outlook on the price front and expect the prices to remain stable

• Indian real estate is expected to slow down with reduced capital expenditure and lower demand from the consumer segment. The travel restrictions are taking a toll on the commercial real estate transactions

The downturn caused by COVID-19 is but a temporary one. It differs from the previous global economic shocks since this is a short-term crisis bound to pass and doesn’t affect the economic fundamentals. Once the COVID-19 outbreak is under control, we can expect the global real estate market to be back to normal as housing is always a necessity.

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