As Spain slowly re-emerges from the horrors of COVID-19, the country is preparing itself for an uncertain future. Alongside human tragedy is the loss of jobs, failing industries and a crippling contraction in the economy.
It is hardly surprising, with the closure of notaries and banks, stringent viewing restrictions and border controls, that the real estate market in Andalusia suffered during the coronavirus crisis.
Since May 18th, the date when permitted viewings came into effect, the industry witnessed a strong surge in enquiries and viewing requests, instilling confidence that sales will soon resume once international borders reopen and buyers can once again set foot on Andalusian soil.
While it is difficult to predict the long-term COVID-19 effects to the real estate market, leading real estate players are confident that there will not be a return to the devastating recession as witnessed in 2007. During this long period of lockdown, respected real estate agencies have shown high resilience, adapting their activities with the use of innovative technology to continue with viewings and closing deals.
The phenomena of lockdown and working from home has pushed the minds of those already living in Andalusia, especially those two thirds who live in apartments, to reassess their living conditions.
The industry must remain positive and is encouraged by the fact that this challenge has witnessed a global pulling together to support one another in difficult times. The panic has been about saving lives first and worrying about the economy second.
Now that there is light at the end of the tunnel, the industry will soon resume the business of selling real estate even if this calls for long-term safety measures and adapting accordingly.
As for property prices, measures to protect jobs put in place by the Spanish
Government will go some way to prevent any drastic falls. Whatever happens, Costa del Sol remains a hot spot for property investment.
Add to this the fact that households have not been spending in the same fashion as pre virus days, and accumulation of savings takes some pressure off sellers. On the reverse, buyers might decide to sit tight to see if the virus forces prices down in the hope that sellers will succumb to pressure if looking for a quick sale.
However, in Andalusia, luxury villas and high-end developments along the Costa del Sol and other desirable locations in this attractive area will almost certainly retain their value if correctly priced. Whereas in other areas, buyers can hope to see overpriced properties and those in areas not well sought after offered at more realistic prices.
When it comes to new developments along the Costa del Sol, again, this wonderfully touristy area ensures a healthy outlook. The construction industry is seeking help to ease it through these difficult times, with calls to rethink new construction tax and bureaucratic processes.
Given that the sector generates approximately 200,000 jobs, support to ensure survival is crucial. Other measures suggested to generate sales include reduction of VAT on home purchases and deduction in personal income tax on homeownership.
Many other measures proposed recently will, if implemented, boost
sales and assist the stability and growth of the construction industry.
Realistically the next few months will see the industry working hard to make sales and ensure the market remains buoyant and exciting. Each day brings welcome news of entering new phases of lockdown de-escalation along with news regarding opening of the airports, bringing crucial clients who have been waiting to complete postponed sales and allows the industry to set about instigating interest for new foreign buyers.
The actions taken by the Government and communities went a long way to achieve a speedy decline in deaths and active cases. It is the promise of normality and a clear vision of a rapid return to work that spurs people to maintain the economy.
For Gibraltar’s property market, COVID-19 has served a second blow with the lead up to Brexit previously having the country reeling with uncertainty. Boris Johnson’s formal leadership confirmation stabilised the situation to an enormous effect and the early days of January 2020 appeared positive with an increase in interest in purchasing property, especially from Spanish residents working in Gibraltar and looking to relocate over the border into Gibraltar to live and work, circumventing
bureaucratic issues that Brexit put in place.
While it appears that Gibraltar may be Brexit-proof, Coronavirus has struck the globe both physically and psychologically, causing fears of a worldwide recession. For this reason, Gibraltar recognises the need to work hard to build upon previous motives of buying property.
For Gibraltar, luckily, COVID-19 lacked any opportunity to cause significant damage to health with a total of 176 infections as at 18th June 2020, all recovered and no deaths and a real show of solidarity during lockdown to beat the virus.
For the property market, Gibraltar maintains a strong position as an economically attractive Mediterranean location for domestic buyers, property investors and entrepreneurs, due to the lifestyle, weather, diverse business opportunities, and enviable tax structure.
The pressure is on to get the economy strong and push to regain stability, a
challenge the Government vigorously rises to. With its BEAT COVID measures and provisions, to protect workers and ensure continued activity with viewings and property sale transactions including recommendations to use power of attorney for overseas buyers, and continued construction of new developments.
To date, activities are getting back to normal, with estate agents and lawyers reopening their doors, and working within the recommendations for COVID-19 prevention, i.e. sanitising and social distancing. Government offices have utilised online methods for residential, utilities, and health services applications.
With Covid-19 affecting every sector globally, especially tourism, and Gibraltar’s current cases standing at zero, Gibraltar is looking an attractive proposition for working and living. Gibraltar is determined to keep these cases at zero and, while Gibraltar’s economy is suffering inevitably from the fall in tourism and corresponding short term lets, many other aspects remain healthy.
The immediate financial impact from the last three months of lockdown is
understandable with fewer sales, fewer lets and an overall decrease in revenue flowing throughout the country. The impact of this remains unclear, as it does for every country, but in the long term, there is optimism that the Gibraltar property market will quickly recover from this unprecedented state of affairs.
In the enduring spirit of real estate, homebuyers, sellers, banks, and construction, remain optimistic for the future. The consensus within the industry is that, while forced to alter working conditions for this period, inboxes remain buoyant with frequent enquiries and genuine interest in properties from overseas clients still keen on buying property here in Andalusia.
Here at HABiKONS, our qualified team remain busy, supporting clients online and on the telephone with every aspect of property services in Spain and Gibraltar. We have been on hand and happy to help with existing and new property sales and purchases, while keeping safe within the guidelines with home working and remote meetings.
Our head office is located at 30-38 Main Street, Don House Arcade, Gibraltar or to learn more on our services, visit www.habikons.com.