Global deficit and other records. How the residential real estate market faces a pandemic.
In the US and Europe, demand sharply revived and property prices rose. Listings are leaving market faster, the deficit of offers has worsened. People buy housing in the suburbs of megacities and even in the outback.
The pandemic has not brought down house prices in Europe and America. In the second half of 2020, almost all countries went through high and sometimes boom in demand. The main reason is that those who were unable to buy housing during the first lockdown returned. In addition, the pandemic has set new housing requirements. And, of course, historically low mortgage rates played a role.
“The last year crisis was obviously not of an economic nature, the majority of potential buyers did not have less money,” says Philip Berezin, editor-in-chief of the Prian.ru overseas property portal. Firstly, despite the fact that GDP in Europe and the United States declined, developed countries organized unprecedented measures to support the economy, and in the first lockdown they also supported citizens. Secondly, low interest rates and cheap (1.5-2.5%) mortgages contributed to strong demand. In European countries – Germany, Austria, Switzerland, Holland – keeping money in a bank means, in fact, paying the bank, so people began to take money from banks and invest in real estate. This trend has existed before, but in 2020 it has become more noticeable. ”
“Mainly positive dynamics was demonstrated by the most stable conservative destinations in Europe, such as Berlin, Frankfurt, Geneva and Zurich,” adds Marina Shalaeva, Director of Foreign Real Estate and Private Investments at Knight Frank. There were growing areas where it is possible to obtain a residence permit or citizenship when investing in residential real estate, for example, Spain, Portugal, Greece and Cyprus. ”
If the borders are opened, the markets expect a boom, primarily driven by deferred demand, Berezin said. The number of transactions will grow, at the moment it can set local records, but there will be no sharp rise in prices; in developed countries, growth is likely to be even less than in 2020. If the pandemic drags on, first of all, resort countries will be affected, entry to which will be limited – there may be discounts from both developers and individuals that will affect the overall picture, the expert suggests.
Forbes figured out why the pandemic has heated up housing markets in different countries, where the global deficit and other records came from.
USA: record low rates and shortages of listings.
Increased demand for homes, low mortgage rates (declined from 4.5% to 2.8% over the year) and a shortage of supply have led to a rapid rise in prices in the United States real estate market. According to a monthly report from Realtor.com, the median home price increased 15% in January compared to the same period in 2020. Currently, the median offer price is $ 346,000 per home. Mortgage rates have not risen above 3% since July. In December, the rate was 2.65%, according to the largest mortgage agency Freddie Mac, this is a record low rate in the last 50 years. As of January, it grew slightly – up to 2.77%.
You can read more about America in the original material at the source link below.
UK: Price Rising and Market Revitalization with tax incentives.
Over the year, house prices in the UK rose by 7.3%, the highest growth in six years, writes The Guardian. Demand for real estate increased in the second half of the year, which directly affected pricing. In July, to revive the market after the spring lockdown, the UK authorities canceled the tax on the purchase of real estate under £ 500,000 until March 31.
You can read more about the situation in the UK in the original material at the source link below.
Spain: prices are going down in major cities.
On average, house prices in Spain, according to the Idealista portal, increased by 1.6% over the year. A square meter in January was € 1,786 on average. By December, prices increased by 0.4%, by October – 2%. Experts predict that prices will continue to rise smoothly in most regions in 2021.
You can read more about Spain in the original material at the source link below.
France: Parisians leave the City of Paris.
At the end of 2020, apartments in France increased in price by 6.6%, houses – by 6.1%, writes Bloomberg. Prior to that, the growth in house prices was more modest: in 2019 – by 4.8%, in 2018 – by 3.4%. According to FNAIM, 980 transactions were registered in the country during the year, while last year – 1065.
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Germany: on the way to aт own apartment.
For the first time in many years, offers in Berlin has begun to slowly increase, according to Tranio. Nevertheless, it is not yet able to fully satisfy the demand. According to Guthmann, the German capital still lacks about 200,000 apartments for each family to have their own home. On the main German real estate portals in the last 12 months, only about 35,000 apartments in Berlin have been exhibited, according to Tranio experts.
You can read more about Germany in the original material at the source link below.