One of the most frequent search queries after the recent global COVID-19 outbreak has been “how will coronavirus affect house prices?”.

One of the most commonly search for queries on the internet after the novel Coronovirus outbreak globally was “will the outbreak have an impact on real estate prices?

The simple answer is yes! Real estate prices the world over are expected to go down. Up until the outbreak, however, things seemed to be going pretty good for real estate markets globally, gaining steady growth with measures such as cutbacks on the interest rates as well as the assuaging of credit stipulations. The outbreak of the COVID-19 albeit has completely transformed this scenario into a bleak one. 

Incentive Measures and Rate Cutbacks Haven’t Done A Lot

As soon as the outbreak of the virus began spreading more and more, the Research Bank decided to cut back on rates, as a measure to prevent the real estate market from collapsing. While this normally would be a great thing for real estate prices as they conventionally tend to increase, it was not what turned out to be. 

The government meanwhile also brought several incentive measures into place as a plan to introduce some financial inducement, which is what most governments do under such circumstances. This in turn, much like the cutback on real estate interest rates turned out to have a drastic negative impact on other facets of the economy. And although for a short period both the incentive measures and rate cutbacks seemed to be working, their negative effects on other facets of the economy ultimately also caught up with the real estate prices. 

What’s In Store For Those Looking To Purchase Real Estate? 

During such circumstances where a global pandemic has put countries, economies and most importantly day-to-day living in crisis mode, it seems like those with regular paying jobs will be in the best position to purchase real estate. In fact, such people should definitely take advantage of such a situation to purchase that piece of land, a house or an apartment that they had their eyes on for a while, but seemed just beyond their reach because of their limited budget. Those buyers who simply cannot afford to make any real estate purchases because of the fact that they do not have a guaranteed source of income should think about waiting for the crisis to die down and the economy to get back on its feet again, before thinking of making a decision.

The Situation For Those Looking To Sell Real Estate

For real estate dealers and sellers, things certainly seem dull. Those real estate marketers with a bit more room to wiggle and a cushion to fall back on stand a chance to weather the storm. Such sellers can definitely think about deferring sales and think about waiting for the COVID-19 crisis to end and the economy to recover. Meanwhile, those who are desperate to sell their real estate because they don’t have any backup plans and a lack of flexibility that prevents them from waiting out this crisis period will have to settle for the present real estate market rates.

How Do Things Seem For Real Estate Investors?

The real estate market in many places seems to be suffering from a bit of saturation presently, as there the decline in rent trajectories has been anticipated. While real estate investors can expect to gain a bit from the cutback on rate, any gains that they make in this regard will be evened out by the declining rent trajectories, at least until the foreseeable future, till some semblance of normalcy returns to the economy and the world, at large. 

In conclusion, 2020 is anticipated to be a tough year on the global economy as a consequence of which the real estate prices are also bound to witness a sharp decline. With a major recession and depression-like situation looming large, numerous companies and businesses that simply can’t afford to prolong their operations at full capacity any longer have started laying off significant portions of their workforce. And it’s not just big corporations that are being affected, small businesses (except those dealing with essential commodities) are bearing the brunt of the pandemic as well.

While things certainly seem bleak for the rest of 2020, 2021 albeit holds a lot of promise in terms of the economy bouncing back and the real estate market recovering. The momentum that the real estate market was managing to sustain before the pandemic hit, however, might take some time to return.