Many people wonder: How will the coronavirus affect house prices? What if you want or need to sell? Will this current real estate crisis create investment opportunities as it has already happened in previous crises?
At Sun Beach Estates we want to offer our point of view as real estate specialists in the area of the New Golden Mile. For this we are going to highlight the most important factors that will affect the real estate market in our area:
1. A financial and real estate crisis very different from that of 2008.
Many people assume and believe that this current health crisis will impact in the same way that it did with the crisis of 12 years ago, where prices fell by 40%. But that was a 'bubble', this crisis is different and both the real estate and financial markets are much healthier.
There is no reason to expect price drops as dramatic as those we experienced 12 years ago, however, the economy is in 'quarantine', the crisis is looming and the real estate market depends directly on the health of the economy.
2. What to expect in the 2020 real estate market.
Will prices drop?
Surely yes. There will be far fewer transactions, fewer buyers and sellers. A drop in prices is expected from 10% to 20% or so, however, this will depend first of all on the location, quality of construction, age and condition of the property. Also consider whether the property is over priced or realistic to start with and then the strength and desire of the owner to sell.
3.Times of crisis, time of opportunities.
In favor of buyers in times of crisis, there are very good investment opportunities, for those who have liquidity, this is a very good time to make a purchase, both due to the expected drop in some property prices and also the low rates of the Euribor.
4.Optimism regarding the real estate market on the New Golden Mile.
Despite the current circumstances, we are very optimistic regarding the medium-long term of the real estate market in our area, especially compared to other tourist areas in the Mediterranean basin. Estepona and the New Golden Mile property market were growing strongly before the coronavirus outbreak so we believe that this area will recover faster than others.
Our preliminary analysis leads us to believe that the recovery from this crisis can begin as early as the first half of next year.