How the COVID-19 pandemic will affect the real estate market?
Will it be easy for buyers and sellers to re-align in the post-corona normal? Siddharth Mahajan, Tulip Group owner UK based real estate entrepreneur answers.
Covid-19 is causing considerable wariness as concerns continue to mount over its potential spread, duration and deadliness and any effects it could have on global economies.
But what does this mean for the U.K. property market?
Coronavirus has brought the U.K. to a standstill and not even the housing industry, the bricks and mortar of our economy, is immune to its effects. We’re not quite at a complete freeze yet, but the options available are narrowing for homeowners and tenants. With about a quarter of the world in lockdown, the order to stay at home has taken on a new dimension for one of Britain’s favorite pastimes: property. The government effectively froze the housing market because of coronavirus, urging transactions and mortgage offers be put on hold.
Property values may decline as much as 10% this year. The British housing market is deeply ingrained in the national psyche and interrupting the housing market shows just how disruptive the pandemic is to national life.
As most companies and organizations have proceeded to implement policies of “zero contact meetings and no visitors”, the real estate market is gazing at the future with uncertainty, however, accompanied by optimism. It is difficult to think of a business that has not been impacted by the covid-19 pandemic, but for the real estate sector, the impact of the crisis cannot be gauged precisely at this point.
While experts foresee a brief dip in the business, we can’t help but anticipate the possible hitches the real estate sector will face in the months following the significant world health crisis. Researchers suggest the sector will have to endure problems mainly pertaining to labor, finance and demand. Getting back the contract workers who have migrated back to their hometowns in the absence of work, delay in project completions and staggered cash inflow will create a vicious cycle that will perhaps take a while to come to a halt.
The demand-supply disruption may be unavoidable because during such times, people stall their plans of big-ticket purchases and this will directly have an impact on sales. Developers anticipate increase in raw material cost however they may not be able to pass that on to buyers in the current market situation. Essentially, the prices will remain stagnant due to lack of transactions but costs may take to an upward curve.
These possibilities are looking us in the eye, but what we don’t know yet is the lingering impact of this pandemic on the real estate sphere.
Will it be easy for buyers and sellers to re-align in the post-corona normal?
There are no straightforward answers. Opinions run rampant on how fast the economy will re-boot. While some experts believe the sector is in for an all-time low, some trust it will bounce back stronger than ever. We would like to believe the latter. Despite a sudden halt to activity, the housing segment will emerge powerful because ultimately the home is where you feel safe. And the need for a safe haven remains cardinal.
Siddharth Mahajan, Tulip Group owner says, “No one knows how persistent the coronavirus will be, or what the lasting social and emotional impression on our lives will be. But it’s crucial to hold up a positive sentiment because the law of nature takes its own course and spring must arrive after winter. History testifies that governments, markets, businesses and people have always pulled through catastrophes and the growth trajectory only leaped higher each time.”
Conclusively, the goal is to deal with the menacing COVID-19 and its after-effects on every aspect of life with hope and a positive outlook. Mankind is not new to epidemics, and every challenge is an opportunity for the human race to come out stronger. Siddharth Mahajan, Tulip added, ”Whilst we worry about the future of real estate, the primary problem in front of the governments across the world remains to check the spread of the virus and endeavor towards orchestrating a solution aggressively. As for the real estate industry, let’s focus on the light at the end of the tunnel. The fall maybe inevitable, but so is the rise. So, as the Government actions to contain the virus, we can be affirmative and anticipate a robust housing demand in forthcoming seasons. “