The brake has been slammed on, in relation to the sale and purchase operations. Experts and operators in the sector anticipate a stop in the number of housing transactions. The coronavirus will cause delays in purchasing decisions among those people who were considering changing their homes, among those who had started the process of finding homes and among those who had already seen apartments and were doubting whether to reserve the one that had most affected them. liked it or not. These potential buyers may be thinking about the effects that the coronavirus may have on the real estate market in the form of possible price drops that they can benefit from later.
The possibility that buyers who have reserved a home, depending on the signal they have deposited, may even be willing to lose it. Those who will go ahead with the transaction will be those who already have the mortgage granted and, in fact, according to their testimony, there are no delays in signing the notaries; the buyer who has his appointment already fixed with the notary does not delay it. And, according to this market operator, it is not expected that based on the measures and recommendations transferred by the Government yesterday, the situation will change: those who have the mortgage granted will end up carrying out the operation.
There are people who were going to buy a house that has suspended that intention and that even buyers who have signaled a flat are withdrawing. And those decisions are attributed not only to the fact that within a few months cheaper flats can be found but to the fact that there are some companies in a very vulnerable situation, which leads their workers to withdraw in their intention to buy. Therefore, there will be a break and, especially, in Madrid, which is considered a focus worldwide.
The impact in Madrid can be very relevant for all real estate transactions in Spain, given that it is a market that represents 14% of the country's total operations.
Investment demand, which had been declining throughout the past year in anticipation of lower profitability, will be eroded by the coronavirus, and domestic demand will also continue to be depressed. Also, in the event that financial markets continue to be tense, the availability of credit could be reduced. Although the issue that he considers most decisive is the impact that the coronavirus has on employment, particularly in large companies that are short of supplies and decide to undertake or move production to other places. It should not be forgotten that the slowdown in tourism can also have an impact on home buying and selling operations on the coast.
Experts consider that the stoppage in the number of new transactions could last for three or four weeks and that within two months they could be buying homes again. Recovery is real estate may be somewhat later than in other sectors, but simply because the purchase decision and the closing of the transaction last longer than the acquisition of other goods and services, much more immediate and less expensive. And, regarding the impact it may have on housing prices, it is considered that it will only be noticeable in the event that the suspension of operations is prolonged for a long time.
In any case, the slowdown in the real estate sector came from behind. This morning the INE data was published according to which the price of housing rose 3.6% in the fourth quarter of 2019, which was its smallest year-on-year rise since the first quarter of 2015. type of housing, the growth of the price of the new one was 5.3%, 1.3 points below the previous quarter, while the rise in second-hand homes fell one point compared to the third quarter, to stand at 3.4% year-on-year.