It’s been such a long time since we had to put up with being locked down in our apartment or house. One thing this coronavirus pandemic has done is to make us change the way we feel about our own homes. This shift might have a tremendous impact on property markets worldwide, giving higher importance to estate agents, 3D floorplans Maidenhead, and property surveys..
Business failures, wage cuts, wide-scale unemployment, and job uncertainty are only a few of the factors that will influence real estate purchases, since most people will surely be more cautious about such a major investment – the purchase of a new home. One of the consequences might be the falling of house prices. We’ve seen that already during the last recession, in the UK as well as in many other countries.
In May, at 1.7% fall from the previous month, the UK has seen the largest decline of the Nationwide house price index for 11 years. Nevertheless, specialists are optimistic, as they see the signs of a market stabilisation. They think this happens because the situation is different than a regular economic downturn.
The current situation has rather been the result of the UK government – like many others worldwide – deciding to put a big part of the national economy on hold, in order to stop the spreading of the virus. At the same time, they had to put in place some measures to protect affected businesses and households.
As lockdown restrictions get lifted, everyone expects to see a rebound of the economies and consequently of the housing markets.
In the US, real estate prices are on the rise. According to real estate experts, in some areas, there’s a six months moratorium on evictions, which is rather unusual.
The result is that banks and landlords have to bear the immediate burden of the crisis. However, since the US unemployment rates have skyrocketed since the coronavirus lockdowns, there’s a good chance of trouble later on.
It’s also worth mentioning that there are many other factors that have a direct influence on the property sector. Many people have realised that working from home is possible and convenient, as it saves us from commuting to and from work. This fact alone has an impact on the house market.
According to Rightmove, the UK property website, there’s been a rise in the number of individuals seeking for a home away from busy urban areas and city centres. The preferences of potential buyers have shifted toward homes with larger gardens and space for setting up a home office. Even though this may be a reversible trend, we can’t deny the influence of coronavirus on the consumer behaviour.
The commercial property sector is even more dramatically affected, particularly on the UK’s High Streets.
Experts at Nottingham Trent University consider that the retail sector in the UK has had huge problems for a very long time. On top of that, the recent furloughs have eroded into their incomes even further, making them more cautious about spending money.
Providers of office space might be just fine, provided that there won’t be a second or a third coronavirus wave. There’s nothing that could determine property values to change.
There are two main things to consider in regard to the property market in these unusual and unforeseeable times.
First of all, even if property prices fall, buying might still be a good decision. As tricky as it may sound, property is a long-term investment, with excellent prospects of security and steady income.
When you compare government bonds that pay 0.5% per year, you can see how property that makes you 3% to 5% is actually a wise investment and a reliable source of income regardless of whether you are a global investment fund or a private investor.