The real estate market and its industry are affected by the Coronavirus pandemic. Many believe that the said virus caused a huge impact on both. This means that many would have doubts, thinking twice in investing due to the massive effect of the said global pandemic.
The Real Estate Is Badly Affected by the Coronavirus
According to BBC News, many people nowadays will have a hard time being convinced to invest in real estate properties, such as buying a new home, due to the negative effects brought upon by the said pandemic. Those negative effects that stemmed from it are listed below:
- Massive unemployment
- Wage cuts
- Business failures
- Job uncertainty
Those factors led many to avoid spending their remaining cash in investing in the real estate market. It resulted in the prices of home properties dropping significantly, which is highly similar to the previous US Housing Bubble crisis that happened a few years back.
There was a significant price drop in the United Kingdom alone in the nationwide house price index, wherein the prices dropped by 1.7% in May of this year, which is the biggest drop in 11 years.
However, many countries and their governments are optimistic that everything will rebound back to normal now that their economies are being slowly opened again to the public, one step at a time. One example would be the United States, wherein their housing prices have increased again and are still rising. Even though the unemployment rate always tallies at 13.3% last May 2020, people are now starting to work inside their homes has somewhat helped in their economy's comeback.
Aside from that, there are other effects that the Coronavirus has brought to the global property market, both positive and negative. According to Cushman & Wakefield, listed below are some of those said effects:
- The said pandemic has a huge negative effect on the Chinese economy, which can affect the global economy as an unwanted result from it.
- Most of the global stocks in most markets have dropped their prices significantly. This can be a huge opportunity for those in the stock market business.
- The effects of the pandemic have also affected banks all over the world. This can be either a good or bad thing, depending on your bank and your country.
As mentioned earlier, most governments around the world are optimistic that their economies will slowly rise back again, as many signs are showing that the economy is recovering greatly at a steady pace, wherein interest in huge houses has started to rise up again.
Effects of the Coronavirus In Other Parts of the World
Although there is a positive rise amidst the negative effects of the Coronavirus, it is not all happy and sunshine in other parts of the world. For example, in the Philippines, the local residents in Manila (the country's capital) are hugely worried that Chinese investors will take advantage of the current low and falling prices of real estate properties due to the said pandemic, according to Nikkei Asia.
It is noted that there is a noticeable drop in real estate prices around the country, amounting to 15%. This can mean that local investors can be priced out against foreign investors such as the Chinese. This may cause further friction between the two countries, as the current president of the country (Pres. Rodrigo Duterte) keeps on turning a blind eye to the Chinese aggression over the disputed South China Sea/West Philippine Sea and the other problems Chinese people brings in the country.
