Has coronavirus contaminated the property market?

Our country, like many others, is currently experiencing an unprecedented health crisis. The coronavirus epidemic, if it is not the first of significant magnitude to affect human society, is testing an economic and social organisation that is globalised and far more complex and interdependent than in the past. Legitimate concerns are being expressed about the post-crisis period, regarding the conditions for resuming activity. Focus on the consequences already expected for the rest of the year in property matters.

The property market on hold

The coronavirus epidemic forces us to modify our habits of living. In the property domain, everyone has noticed this to their detriment. The effects are significant and immobility is the order of the day. The necessary lockdown imposed by public authorities requires adherence to restrictive rules for property viewings, meetings in estate agencies or at solicitors. While tools like virtual tours or electronic signatures allow certain activities to be carried out more comfortably, finalising the acquisition or sale of a property during the crisis period may prove challenging. The dematerialisation of services cannot entirely replace human contact in this area.

Additionally, the darkening economic context and direct impact on numerous jobs (or salaries) encourages each participant to exercise caution and wait for greater clarity. However, it is possible that the consequences of the health crisis may be mitigated at the year’s end.

A strong rebound is likely

The property market has this advantage: transactions not carried out during this time are not necessarily lost. Because buyers will always need to purchase a property, just as sellers will need to sell theirs. The absence of activity during these few weeks or months should therefore lead to an explosion in supply and a (more gradual) recovery in demand at the end of the lockdown period.

Another advantage for buyers: an increased number of properties for sale will allow them to choose between more properties, and to be why not more demanding. A point that will otherwise disadvantage sellers who may potentially have more difficulty finding a buyer.

The exit from the crisis could be financially interesting

To continue with the increase in the number of properties available for sale, this is likely to cause a fall in prices, when sellers choose to reduce their asking prices in order to part with their properties more quickly. Especially if demand recovers only slowly: the crisis and lockdown period that has paralysed the country, with financial losses for many economic actors, may push some projects back in time or subject them to a longer search or to looking for more economically advantageous properties.

On the banks’ side, the news should be positive: the absence of mortgage uptake for a few weeks will encourage them to grant more after the crisis, and at advantageous rates.

If overall buyers should gain financially, the coronavirus epidemic will be no easy ride for anyone, at least psychologically. Notably for property workers, estate agencies and independent agents, who will need to hold firm during this period before seeing their activity resume energetically in a few weeks, we hope.