At the end of December, the Chinese authorities detected the existence of a new coronavirus (the so-called COVID-19) in the city of Wuhan. In January, the World Health Organization (WHO) decreed a global health emergency and real estate markets were shaken. To what extent should we worry about the impact of the virus on the real estate sector?
The coronavirus continues to add infections and fatalities. Currently, more than 30 countries continue to register confirmed cases and the number of people affected worldwide exceeds 80,000.
The World Health Organization (WHO) itself has warned that we could face a pandemic.
Despite the rate of mortality of the coronavirus at the moment is reduced, more and more analysis firms and the market itself are warning of the impact it can have on the economic world, and even in the real estate sector.
One of them is the manager Janus Henderson, who has summarized what they are, the sectors that are losing and winning the most with the advance of COVID-19.
Among the sectors that are most affected are hotels and retail (sectors related to tourism and distribution), as a result of cancellations of thousands of trips around the world and the fear of consumers to go to stores and shopping centres.
Housing is another sector that is suffering the consequences of the coronavirus. In the first week of February alone, the sale of houses plummeted 90% in the 36 main Chinese cities and most real estate agencies are closed.
Likewise, the price of housing in the country has experienced a more moderate growth in the last two years.
Therefore, in the residential sector, there is also a winning business: the sale of properties online. According to the South China Morning Post, there have been more than 47,000 operations worth 8,300 million dollars (about 7,660 million euros).
From Janus Henderson, they affirm that not only the house has benefited from the expansion of the coronavirus, but also the logistics and other alternative assets such as data centres, telephone towers and prefabricated housing communities have been favoured, thanks to the Telecommuting and Internet shopping.
The positioning of real estate investments
According to Janus Henderson, these sectors are benefiting from favourable structural factors by incorporating disruptive trends that imply demographic changes and technological advances.
Throughout Asia, the coronavirus outbreak has led many companies to implement different modes of distance work plans, highlighting the profitability of flexible workspaces that can change the way in which companies conceive the physical requirements of The offices of the future.
The increase in online purchases and data connectivity, together with the increase in people working from home, support the demand for this kind of infrastructure.
In consequence, we can see how the Covid-19 outbreak is causing indirect consequences on the real estate market by enhancing the change driven by new lifestyle and technological advances, which are changing the use of real estate and its demand.