Consequences Coronavirus (COVID-19) and the Spanish housing market
It is now clear that the Coronavirus will control life and the economy in the coming months. The consequences will also be noticeable during the main sales period of the Spanish housing market. This will be a fresh headwind for a market who’s already struggling to move forward.
The Coronavirus (COVID-19)
Although life appears to be somewhat “normal”, the consequences of the Coronavirus are serious. Countries like Italy are expected to lose over 10 million tourists in the next three months, the Mobile World Congress (the world’s largest mobile technology trade show) in Barcelona has been canceled, and Europe’s largest regional airline, Flybe, has collapsed after a massive decrease in the number of bookings. (source)
The situation in Spain
In the meantime, the situation of the Coronavirus in Spain has become extremely serious. Spain is currently facing one of the fastest rising infection rates in the world. This has forced the Spanish government to impose a national blockade until March 31, 2020. This is expected to have major consequences for the Spanish housing market in the next three months.
Until March 31, 2020, a “State of Alert” applies in Spain, with people likely to stay at home and isolate themselves. Meanwhile, the entire country is placed in a cordon sanitaire. All tourist and recreation companies are closed during this period. This will disrupt the Spanish economy, which is highly dependent on tourism and services. But this also has consequences for the Spanish housing market. The market for second homes in particular is highly dependent on tourism. This is expected to paralyze sales activities for at least three months, possibly longer.
The consequences for the Spanish real estate market
Normally, the first six months of the year are always the best for holiday home sales. More than 50% of sales take place in the first half, especially in the second quarter from April to June. European travel is expected to be significantly disrupted by the Coronavirus in the next three to six months. This can have a significant negative effect on the sale of Spanish (holiday) houses. Potential buyers are not able to visit Spain, so many will cancel their purchase plans for this year. If so, a headwind from the Coronavirus will hit the Spanish property market at an important time. Namely in a period when both local and foreign demand for houses in Spain is increasing.
Consumer confidence is always an important key to the health of the real estate market. Falling sales do not increase this confidence. Coronavirus is expected to reduce sales of Spanish holiday homes in 2020.
The Coronavirus shock is likely to create an opportunity for buyers when the dust settles. But of course it is bad news for sellers. Sellers who are not in a rush to sell, should consider taking their property off the market until buyers and confidence are back. (source)
What can and cannot during the closing of Spain
Spain is locked. Until March 31, 2020, everything, except supermarkets and pharmacies, will be closed. In addition, people are not allowed to leave their homes, except to go to work, buy essential supplies, or for exceptional reasons. These measures have been taken in an attempt to slow down the spread of the Coronavirus. The measures apply to everyone in Spain, regardless of the region. The police are also empowered to stop and interrogate people who drive on public roads outside and in vehicles. These measures also apply to the Balearic Islands, the Canary Islands and the North African enclaves of Spain. Public transport will not be completely shut down, but will be reduced by 50%.
Check here for the full list of what you can and cannot do during the closing of Spain.
For anyone interested in the difference between COVID-19 and various other colds and flus: