In a conversation with the Remax Real Estate Center, we present the results of a large study on the impact of COVID-19 on the real estate market
The RE / MAX Real Estate Center is the largest part of the large RE / MAX Europe network, as part of which a large European study was recently conducted to examine the potential impact of COVID-19 on the real estate market.
As an industry leader in the real estate and real estate franchise sectors, RE / MAX Europe is in a unique position to leverage its international network and gain valuable early-stage predictions on how COVID-19 will impact the real estate market over the next 6 months.
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WHO PARTICIPATED IN THE RESEARCH?
2,310 respondents took part in the survey, of which 1,759 agents and 371 RE / MAX franchise owners, of which 47.1% were women and 52.9% were men. Furthermore, 52.4% of respondents are older than 45 years, and 42% are in the age group between 30 and 45 years. Almost half of the respondents who participated in this research have been working in the Remax system for over 5 years, and only 25% of them have less than 3 years of experience, explain the largest Croatian franchisor.
CHANGES IN APARTMENT AND HOUSE RENTAL PRICES
Although prices were expected to fall by 5-10% for apartments affected more than single-family homes, survey participants said rental transactions did not have significant shifts due to the COVID-19 situation. More than 50% of respondents also predicted that urban housing would be affected more than those in rural areas, with the exception of Germany where 50% of participants from the area predicted almost no market change in rural areas and a 20% price increase in urban areas…
CHANGE IN PROPERTY PRICES FOR SALE
More than 50% of participants expect a price reduction of 5-10% with a slight downward trend in family house prices. Similar to real estate rentals, urban housing is expected to be affected to a greater extent than rural areas. Again, Germany is remarkable where participants generally predict price increases in urban areas of up to 10%. France, Finland, the Netherlands, the Czech Republic, and Turkey also forecast positive prospects with an increase of up to 2-5% for single-family homes. Regarding the value of the commercial real estate, respondents predict a decline of 10-20% in the coming period.
HOW ARE THE OTHER TRENDS?
In the number of sales transactions in the next 6 months, the biggest decrease is expected to be in apartments, 50% of participants from France, Poland, and Bulgaria predicted an increase in sales transactions, but only with regard to single-family homes. Respondents’ responses suggest a reduction in the number of transactions, especially for commercial real estate projected across Europe. Meanwhile, more than 40% of all participants project a reduction in investment property. Again, Turkey was the main deviation with 45% of participants expecting an increase in the number of contracted jobs. France, the Netherlands, and Turkey are projecting an increase in contracts with a special focus on investment real estate.
Most participants think that EU markets will not recover by mid-2021. The survey showed that 61.4% believe there will be no more drastic changes and that the market will recover in early 2022. The survey also indicated the main reason for the small number of transactions, which is high the unemployment rate, along with the reluctance of sellers, conclude from our largest Remax franchisor, the Remax Real Estate Center.