The coronavirus is creating a serious health and economic crisis that is causing havoc in all sectors of the population. One of them is the real estate. Although, since the beginning of 2020, there has already been a significant drop in residential property prices in Spain, the pandemic has exacerbated that decline. According to the real estate network Remax, who has surveyed their own real estate agents, lThe drop in prices in both rent and sale could be below 10%, while the decline in operations could reach 20%.
The real estate portal pisos.com indicates that this decline is mainly due to the historical job destruction that has been generated as a result of the pandemic. Families have seen their income reduced, so purchasing decisions have stalled and demand has dropped considerably, causing prices to stop being so stressed. Due, many investors take advantage of this situation to counter offer with drops of between 15% and 20% about the starting price, something that not all sellers are willing to accept.
On the other hand, while demand decreases, the offer increases considerably. COVID-19 is being especially deadly in older people. Many have died from this disease and the properties they owned have passed into the hands of their heirs, who try to sell them quickly to get a significant sum of money to provide some relief in these difficult economic times. Therefore, the price of these properties will be affordable to close the sale as soon as possible. In the same line, entrepreneurs with properties whose businesses have been affected by the pandemic, also they try to get quick liquidity putting up properties for sale that now act as a financial cushion.
According to the price evolution in Spain, we can observe that these tend to regularize. “Prices have been reacting slowly during the summer period, registering soft cuts, but also subtle rises”, Explains Ferran Font, director of Studies of pisos.com.
In fact, based on your company’s monthly sales price report, the average price of second-hand housing in Spain rose 0.44% in August compared to July and 0.86% compared to August of last year. This rise, according to Font in the Economist, is due to the increase in supply in some markets, “where a part of the tourist rental apartments have been transferred to the sale market”.
Compared to August 2019, more striking spikes in the field of communities autonomous occurred in Navarra (4,87%), Canary Islands (4.23%) and Baleares (3.61%), registering the more intense settings in Castilla la Mancha (-3,13%), The Rioja (-2.22%) and Murcia (-1.59%). Regarding the provinces, the major increases from one year to the next they were recorded in Santa Cruz of Tenerife (6,39%), Huelva (6.13%) and Teruel (5,94%).
For their part, steeper descents were in Lugo (-12,63%), Jaén (-7.11%) and Zamora (-6.96%). Regarding the capitals province, uploads strongest year-on-year occurred in Donostia-San Sebastian (9,57%), Palma de Mallorca (8.30%) and Bilbao (7.44%). The most they went down were Córdoba (-5.82%), Teruel (-5.48%) and Jaén (-4,81%).