Impact of the real estate crisis on the housing market
For several months, the real estate sector has been strongly impacted by the global economic crisis. The consequences of this crisis are being felt in the housing market, with a significant decrease in real estate transactions and an increase in prices.
Decrease in real estate transactions
The economic crisis has led to a decrease in households’ purchasing power, which has resulted in a decrease in real estate transactions. Indeed, many potential buyers have been forced to postpone their property acquisition projects due to the uncertain economic situation. Home sales have thus dropped significantly, impacting the entire real estate market.
Additionally, the lockdown measures put in place to combat the Covid-19 pandemic have also had an impact on real estate transactions. Property viewings have been limited, which has slowed down housing purchase and sale projects. Real estate agencies have had to adapt by offering virtual tours to overcome this situation, but this has not been enough to revive the market.
Rise in prices
Despite the decrease in real estate transactions, real estate prices have experienced a significant increase. This increase is mainly due to a lower housing supply than demand. Indeed, many sellers have chosen to withdraw their property from the market while waiting for better days, reducing the availability of homes for sale.
At the same time, the demand for housing remains strong, especially in large cities where the supply of housing is traditionally more limited. Potential buyers are therefore willing to pay the price to acquire a property, leading to a rise in prices in the housing market.
Implications for real estate market actors
The real estate crisis has repercussions on all market actors. Real estate agencies are facing a decrease in their turnover due to the decrease in transactions. Some have had to reduce their staff or close their doors, while others have had to turn to digital solutions to continue offering their services.
Sellers, on the other hand, see the value of their property stagnate, or even decrease in some cases. Some are forced to lower their asking prices to successfully sell their property, which can result in a financial loss for them.
Buyers, on their side, are facing increased competition in the real estate market. Properties available for sale are scarce, pushing buyers to make quick decisions on properties they are interested in, and sometimes to overbid to secure the sale.
FAQ
What are the prospects for the housing market in the coming months?
It is difficult to predict the evolution of the housing market in the coming months. It will depend on the evolution of the health and economic crisis, as well as the measures taken by authorities to support the real estate sector. The market may stabilize once the economic situation improves, but it will likely take time before the market regains its pre-crisis momentum.
What advice do you have for sellers and buyers in the housing market during a crisis?
For sellers, it is important to be realistic about the price of their property and not hesitate to lower their asking prices if necessary. It is also advisable to highlight the strengths of their property to attract potential buyers.
For buyers, it is recommended to be proactive in the real estate market and to make quick decisions on properties of interest. It is also advisable to inquire about the assistance and programs available to facilitate the acquisition of a property during a crisis.
