2020 has been quite a ride and the good news is, it’s almost over! Looking back on the year brings back a mixture of emotions: From the first shock and disbelief to panic and sadness, to new-found resilience and perseverance. What a strange year!
I think all (small) business owners will agree that while it has stimulated new entrepreneurial talents in many of us, we can’t deny there is a big difference between the different industries.
The property industry has been forced to close for about five months in total, whereas some other industries, such as hospitality, travel and events have still not been able to get going again and no amount of resilience or adaptation can overcome that.
Of course the personal losses that many have suffered weigh the heaviest, and no business interests will surpass them, but business owners and employees who find their business unable to function, are in dire straits. We sympathise with everyone who has been severely affected by the pandemic and who continues to experience it personally.
How has the property market been affected?
Professionally, I would like to update you on the effect of the pandemic on the local housing market, because as with many other aspects of this pandemic, it did not respond as expected.
During the global recession ten years ago, real house prices fell by an average of 10%, and in exceptional cases, by up to 40%. And while the housing market wasn’t the cause of economic woes this time around, investors and homeowners were still bracing for the worst when it became clear that Covid-19 would push the global economy into its deepest downturn since the Depression of the 1930s.
That initial pessimism now looks out of place. In most middle- and high-income countries, house prices have actually risen in the second quarter. Share prices of developers and real estate traders fell by a quarter in the early stages of the pandemic, but have largely recovered from the decline.
Fortunately for us, the local housing market was buzzing once the restrictions were lifted in June. Monetary policy, fiscal measures and buyers’ new preferences and priorities may explain the unlikely boom.
Who’s been buying?
The nationality of our buyers shifted from mainly foreign buyers to domestic ones. However, within the group of foreign buyers, there have been a number who grabbed their chance and decided to purchase remotely after a virtual viewing, buying their dream home regardless and these were not trumped by local buyers.
There is also a difference between the different types of houses when it comes to popularity. Since the coronavirus pandemic, the demand for city apartments has declined and the Spanish are looking for quality of life and living space outside of the cities, now that working from home is the new norm.
The Lecrin Valley’s central location in relation to the city of Granada and the coast, as well as its fantastic high speed internet connections, makes it a popular destination for relocation to a more natural environment, with a better quality of life and more space to work and play, but within the same budget. We have even found that many potential buyers want to spend more on a nicer place to live, so the upgrade is double.
Can house prices continue their upward march?
Governments are slowly winding down their economic-rescue plans, and no-one knows what will happen once support ends. But lower demand for housing may run up against a drop in supply.
Foreign buyers are still actively looking to purchase properties in Spain; Kyero’s website traffic for Spanish properties has increased by 21% compared to 2019 and we have seen a huge surge in interest in purchasing property in the Lecrin Valley from 25-45-year-olds, partly due to the growing trend and acceptance of remote working and partly due to the pandemic.
It may take more than the deepest downturn since the Depression to shake the housing market’s foundations. And with the start of the Covid-19 vaccine imminent, the light at the end of the tunnel is getting brighter.
Are you interested in buying or selling?
If you are interested in selling your Lecrin Valley home, let us know, as we have used our time in lockdown to improve our marketing tools and now offer free valuations, professional photo and video reports, virtual tours and 360° presentations, which become more important every day.
You will also get to benefit of our long-standing expertise in sales and in-depth knowledge of the local market, plus access to our database of buyers and new house hunters to get you a quick result.
If you’re looking to buy in this stimulating market, please feel free to contact me and send your wish list.
We will be the first to inform you about new houses on the market and even if you cannot travel yet, we are able to exchange a lot of useful information and help you get all the necessary processes in place. We are also very happy to host virtual viewings of any houses you may wish to see via quality video connections.
And in the meantime, hang in there! In Spain we say: “Al mal tiempo, buena cara”, which loosely translates to “Through bad times, keep putting on a brave face”, and that´s all we can do for now!
I like to look at these challenging times as opportunities to change and grow, and we will continue to maintain a positive attitude and develop our offer to provide the absolute best service possible to all of you looking to sell and buy property in the Lecrin Valley – our stunning little corner of Spain.
For your information: The last working day of our office this year is on December 23rd, but we’ll return on January 7th, recharged and ready for whatever 2021 has in store!
Happy holidays and see you in the New Year!