Luxury Law has asked to its cooperators what they think about the property market and future outcome following the Covid-19 pandemic.
As most of you might already be aware of, Luxury Law cooperates with a certain number of specialists in the Real Estate sector, including real estate agents and other professionals (Architecs, Geometras, Notaries, etc).
Each file, in fact, requires the attention of more than one professional specialized in real estate.
We have asked to a very prepared Realtor, who worked with us in a number of occasions, what she things about the real estate market after Covid-19 emergency.
She is Collatina Bortolot – founding partner of Bortolot Real Estate agency based in Vittorio Veneto (Veneto Region), and President of FIAIP (Italian Federation Professionist Real Estate Agents) – and we would like to share with our audience her point of view in regards to the following topic.
Even before, but also following the strict restrictions and lockdown of the entire Country, visits on marketed properties have undergone a sharp decline. Initially because people were afraid to be infected, and afterwords for the well known restrictions imposed by law in each Country and Region.
Up to date the consequence has been a strong decrease of visits on properties, but, on the other hands, we have received several calls from clients who wish to sell their houses.
It seems that Coronavirus is not stopping home owners from selling their properties, differently from home buyers who have stopped from buying, but not from searching.
We have not received many enquiries from home purchaser so far, but through our channels we do notice that people are still searching our “properties sale section”.
They are usually second home owners, and this is for two main reasons:
Many second home owners used to rent their houses to tourists, by trying to make some money on short term rentals. Now that Coronavirus is putting the tourism sector at risk, second home owners are no longer interested to keep their proeperties and paying annual property taxes.
A second reason is because more liquidity is needed, since this pandemic has been causing very severe cash flow problems to many workers.
Also, people who own restaurants, small hotels, and other properties excusively used for tourism purposes, and who do not have enough cash to handle all costs, are in a rush to sell their properties as quickly as possible.
The market price might take a hit.
I believe this will happen mainly because of cash flow problems due to the pandemic.
Law restrictions obliged many people to temporary stop their businesses (ie. restaurants, pubs, etc.) with the consequence of not making money for an indefinite term.
In terms of saving the future of their businesses, those who are not financially strong might seek for financial backing or, alternatively, might sell their second house or their business premises. This race to sell off properties, will probably cause reduction in prices.
Those who own properties for tourist use, and are uncertain if selling their properties now or in the near future, will most likely decide to sell within a short term, rather than waiting further.
I have received calls from clients who wish to sell their houses and buying a larger one with garden or terrace. People are now spending more time at home, and this makes them to wish a confortable home for all their needs, such as: separate room to use as a working space, a nice view or a terrace, a spare room to use for doing gymnastic.
Suburban areas have resulted in a rapid increase. Small cities located beyond congested metropolitan areas are also preferible. This is because during the emergency, people have noticed that living in city centers is a fine decision only because of the distance with their offices. Since working from home will become more frequent, I believe people will search their new properties in suburbs.
In a free market economy, an increase in supply leads to lower prices.
Therefore the price is slightly decreaseing, but who is looking for a property in our region should not expect to see the market flooded with cheap properties just yet.
Even if the offer is already increasing (and prices slightly decreasing), people are not easily travelling and prefer to wait until the emergency is over.
What is my conclusion? The price will decrease, but not consistently.