The ghost of the economic crisis of 2008 flew over Spain again during the confinement caused by the covid-19, creating uncertainty in the real estate market: Would the credit drought and the subsequent real estate downturn return?, Would big promoters fall and would the banks be affected? Now, transiting the 'new normal', experts propose a less busy horizon for the sector, cuyo starting point is much more solid to face the recovery.
Esa es la conclusión del último Informe Sectorial Inmobiliario of CaixaBank Research, which is based on factors such as the reduction of debt and financial expenses of construction companies and developers or the solvency and liquidity situation of banks, that "it is more robust and loose". Also, focuses on the "drastic decrease" in the delinquency rate of bank loans to the sector and points out that the construction of new homes "does not seem excessive in relation to structural need".
Lower demand and price adjustment
Although the forecasts indicate that the recovery graph will have a “V” or “U” shape, los expertos advierten de un descenso de la demanda de vivienda debido al impacto económico de la pandemia y sus consequences on the labor market. According to INE data, The sale of houses fell in April on 39,2% —en tasa interanual— y el informe de CaixaBank Research prevé que la incertidumbre genere una fall from between a 30% and a 40% in 2020; with a "gradual recovery" in 2021. "Usually, in economic crises, consumers tend to increase precautionary savings and postpone the consumption of durable goods and long-term investments, like buying a home ”, affirms the document.
In this situation of lower demand, the study anticipates an adjustment in house prices, than “could experience a cumulative decline (2020 and 2021) from between a 6% and 9% ". Also, calculate that the value of real estate will record positive rates in the second half of 2021, but will not recover to the pre-crisis level before 2024. In this sense, geographic and housing type disparities will be notable: "The decline in housing prices will be higher in the second-hand market and in tourist areas, badly affected by the restriction on international mobility ”. An adjustment that will affect to a lesser extent the rental market that will receive "greater demand in the face of the difficulties of households to access property-owned housing".
Uncertainty slows down new construction
The halt to all non-essential activity barely affected the construction sector 15 days and the latest data available on completion certificates, corresponding to march, demonstrate that projects “have resumed relatively quickly” —in recent 12 months are over 81.700 households, a 17,6% more in year-on-year terms—. However, the climate of uncertainty generated by the coronavirus could slow down the initiation of new building projects. CaixaBank Research cifra este decrease in the demand for new construction visas between a 20% and a 40% in 2020, which would affect the number of houses finished in 2021.
Change of habits
The document also indicates that the covid-19 has been able to precipitate a change in consumption habits that were already observed before the pandemic. He telecommuting, that facilitates social distancing and avoids unnecessary displacement, it's one of those trends that the coronavirus could be accelerating. “Directly affects the preferences of buyers on the location and size and distribution of housing”, stand out from CaixaBank Research. A transformation that they consider will have a series of implications that go beyond the real estate sector itself: "Urban planning, transport and public services must adapt to this new reality ".
In addition to factors such as sustainability or energy efficiency, el informe punta a que digitization has been a key differential value: “Companies that had invested in adopting new digital technologies have been able to continue offering their services remotely and in many cases, possibly, the customer experience has been improved ”. This could encourage the client to continue demanding greater flexibility and personalization of the services once the pandemic is overcome..
[Source: The confidential]