Around the world, countries are battening down the hatches and preparing for the peak to pass. Much like the eye of the storm, the first wave of coronavirus has come and gone. As we wait to see where the future will take us, it is important to reflect on the changes we have made, as a result. Of all these changes, the housing and real estate industry is providing a fascinating glimpse into the economic reshuffle that Covid-19 has caused.
Today's Real Estate – A Thriving Market?
In order to report changes, it is important to note what the market was like before all of this. At tiny home companies, they have their finger on the pulse to these changes – but those that have never purchased a property, or those buying for business, might not know the ropes yet. And that is perfectly OK.
The truth is, the housing market across the world was changeable, difficult, and compromised, before the coronavirus hit. Forbes reported new property taxes affecting house sales in almost every state throughout America. In the UK, an RICS report saw the market facing challenge after challenge – and a weakening of sales. It seems that the Millennial generation may be more inclined to rent, and less inclined to buy.
In Australia, the market had been heating up after a 2 year downturn in sales trends (Bloomberg, August 2019). Now? Let’s look at how the world is responding…
Coronavirus’ Impact on the Housing / Real Estate Market (2022 And 2023)
So in this wavering market, what did the housing and real estate industry do? Well, in the UK, the Bank of England decided it was best to freeze the housing market entirely. Mortgage lenders have been encouraged to furlough staff and issue breaks of up to three months. For those that rent, no such relief has been granted.
In the USA it’s business as usual in most states. Economists are grim, and March reports say there is an 8.5% decline in sales. It does not look to be a healthy future for the Real Estate market in America.
In Australia, the future doesn’t look bright either. The Guardian reported in March that the $90 bn AUS investment from the Reserve Bank would not be enough to avoid a recession of the housing market. Economists are citing economic fragility as a sign of reduced house prices on the horizon. Auctioneers have reported an increase in sellers heading to the auction houses in an effort to cash out. It looks a lot like now is the time to buy… at least, when things get back to normal.
Meanwhile, farther east, the Financial Times reports that the Asian housing market is struggling – particularly in western-loved hotspots like Hong Kong. Since consumer confidence has fallen, Real Estate in countries that depend on tourism and holiday homes is in danger of crashing.
Time Will Tell
Unfortunately, time will tell us whether or not the housing markets are going to crash. It might look like it in some places. Then again, the same sellers that flocked to the auction houses may well flock back again when the pandemic is over. Either way, some drastic changes can be speculated in future. It may even change how we do things.
