COVID-19 also commonly known as Corona Virus is one of the deadliest viruses in the world that has disrupted most of humans on Earth. Spreading at an alarming rate, the corona has taken most countries’ economy to a fall including real estate sectors. No one expected a spread of a virus that has out taken most countries and no one thought it would become as serious as a pandemic. Starting from Wuhan, China this virus has been spreading like a forest fire in many parts of the world. There have been more than 30,000 deaths all over the world and it has a direct impact on the country’s economy in all sectors. Let us look at the impact COVID-19 on the real estate sector.
China and its real estate
China has always been a big manufacturer and constructer for many years now. Due to the sudden outbreak of COVID-19, China has been directly affected in the construction activities. The Japanese earthmovers have seen a dip in their businesses as the constructions were stopped due to the outbreak of this fast-spreading virus. The 2 main industries that help the construction industries are iron and steel. China has already closed two-third of its production companies. The lockdown of 14 provinces can furthermore hit the raw materials supply from these places. The lockdown places have 90% of copper smelting industry, 40% of coal and 60% of steel industries which is directly going to hit the companies and industries.
The ban on international travel has already affected the USA as it a major tourist spot. Canada is turning towards recession with plunged oil prices. COVID-19 has been affecting the real estate in Australia too. Europe has been severely hit by the virus and most of it is in whole country lockdown. Every industry has been shut down. It is going to cost many million dollars to get back but more than that all the human capital cannot be used as no one can get out of the house and no industry is functioning. Real estate people are like in the view of what has been happening the deal volume is estimated to reduce to half or nearly $2.5 bn as investors won’t rush in to invest until post-June. Everything related to property development has been in hold for some time now and there have been no demands both from the investor’s and the seller’s side. They are not ready to deploy funds hurriedly.
As far for the evaluation of assets and new housing developments are concerned, it would depend on the demand one and dynamics in supply at this point of time. It has been difficult to give a number to it but the evaluation of assets will definitely be affected and as told above it will be largely dependent on the demand and dynamics in the supply in the micro-markets. Current advisories are stopping people from travelling across the globe due to the outbreak and it has been affecting the people by making it a delay for them to take decisions on the real estate space take out. A far from the information above it is good that you do not invest your money in real estate and other properties as the whole world is in a standstill and you cannot be sure of anything. It is safe that you do not invest in it. People are not having a demand for places and estates so you may never know what is going to happen next. You may not know the wealth of the place if you buy it now because most of the money is going on providing funds so it may turn into anything. Plus the whole world’s market is in a loss hence you do not want to invest in something like property during this time of the outbreak of COVID-19.