Scandinavian Marbella Homes

Covid is the game changer and reduces prices less than expected

The pandemic is in its second or even third wave. The consequences for the real estate industry are like a tsunami. No visits to sites, empty realtor offices, but, high demand and oportunistic buyers. Online viewing, pre-contract reservations over the internet, virtual reality walk-ins are now the rule and no more the excepcion as was the case before the pandemic. The technology was there already and now it gets more used than anybody expected. Nethertheless people would most likely love to be able to go and see what to buy but this will have to wait until the pandemic ceases.

Situation in Spain

Spain’s real estate prices are mostly stagnating due to the corona virus. Homeownership has become cheaper in Andalusia. In Spain, real estate prices have not fallen as much as many buyers and sellers assumed due to the coronavirus. In Andalusia and the Balearic Islands, the prices for houses and apartments have fallen sharply because Corona primarily inhibits the purchase of holiday apartments by foreigners.

We predict stronger declines in winter

Although the coronavirus, including lockdown, travel restrictions and many other rules, had a noticeable effect, it tended to slow growth rather than actually lowering property prices in Spain. Anaysing property prices in all regions in Spain between the first half of 2019 and the first of 2020, during this period, only six regions have seen house prices fall: Andalusia, the Balearic Islands, the Basque Country, Galicia, Asturias and the enclave in Africa, Ceuta. This means that only in these regions did the price decline in 2020 offset the great growth of the boom year 2019. In contrast to the expectations of buyers and sellers, we do not see any decline in the price of real estate at all. In Andalusia, the decline triggered by the coronavirus was significant at 5.8 percent. But here, too, prices are already picking up again: between July and August alone, houses and apartments in the region in the south of Spain were 3.5 percent more expensive, according to data by Idealista.

The largest case occurred in the province of Malaga during the coronavirus emergency, as the business with holiday homes and second homes is essential on the Costa del Sol. Nevertheless, the square meter here still costs an average of 600 euros more than the Andalusian average of 1,600 euros. The second most expensive province of Cadiz is clearly lagging behind with 1,497 euros. The most expensive place for home ownership is Nerja on the Costa del Sol, where buyers have to put 2,800 euros on the table per square meter. This development can be attributed on the one hand to the very successful year 2019, but also to the fact that sellers made fewer losses during the coronavirus crisis than the Spanish average.