The unexpected crisis caused by the COVID-19 pandemic in Spain and across the world has put the brakes on the real estate recovery that began in 2014. In the coming quarters the housing market faces a drop in sales, mortgage signing, prices and investment operations. If the forecasts are right, it may not be until 2022 that the residential sector will fully recover.
Within this maze of changes, market experts believe that we will see new trends in the real estate sector, trends that will not only be reflected on day 1 after COVID-19, but changes that will be here to stay. Among them is the necessary omnichannel commercial presence of real estate, the new needs and preferences of families when looking for a new home, the commitment to online visits and virtual tours or the importance of professionals opting for continuous training to provide the best possible service to customers.
According to the reflections that the real estate world has raised in a recent online event, "#InmocionateEnCasa" promoted by the Union of Real Estate Credits (UCI) and its area of professional development for realtors SIRA (Spanish International Realty Alliance), these are the most important trends that will become a reality in the market after the 'shock' of the pandemic:
Technology is a necessity, not an option
One of the most obvious lessons learnt during the crisis is the need to invest in technology. The coronavirus has driven the digital transformation that the sector has been talking about for years, but that many real estate companies have not yet completed.
According to the SIRA study, most of the participants claim to have held video conferences with their clients and teams through multiple platforms, have used social networks to publicise properties, have made commercial communications through applications such as WhatsApp and have managed to formalise many of the operations that were already underway, from home and thanks to these tools. Thanks to this, real estate agents have a new understanding that we must take care of all channels more than ever, including digital ones.
The boom in online visits
In the coming months it will be essential to implement multiple safety measures to protect the health of both customers and employees, as real estate agencies reopen and visits resume. Many companies are promoting action protocols to encourage teleworking, reorganising the interiors of their offices to increase the distance between work stations or acquiring protective material such as gloves, screens or masks.
In this scenario, physical visits to properties will have to be restricted to the most essential cases (for example, with those buyers already heavily filtered by the real estate agency or with those whose financial study has been favourable). Therefore, it will be necessary to offer clients the possibility of virtual or online tours of properties.
An all-round commercial real estate presence
SIRA maintains that the figure of "the salesperson who shows buyers around a property, those professionals who according to the sector contribute little value, will have very little future. Real estate companies must combine the physical environment (the agency at street level) with the multiple existing digital channels: a suitable website, perfectly managed SEO, a proper presence on social networks, an attractive blog and an attractive content management policy. Four out of every five clients come through an online channel, but decide to go offline for property visits and going to the office. Therefore, the combination of both strategies is key to offer an excellent service to customers," says Francis Fernandez, CEO of SIRA and moderator of most of the round tables in the virtual meetings.
Refreshed training for professionals
The need for continuous and permanently updated training, as it happens in the National Association of Realtors (NAR), the North American association in which SIRA is integrated, has been one of the most valued aspects by the participants of the virtual meetings. As it is a sector in constant change, it is necessary for professionals to be up to date.
New housing needs and preferences
Another of the most obvious trends is that the state of alarm and period of confinement has led many Spaniards to rethink the type of housing in which they want to live. After these weeks of confinement, many people have discovered that their homes do not have what their family needs. Issues such as natural light, wider spaces, better views and landscaping are now the priority.
"Many buyers, interested until now in living in city centres, are rethinking this issue and are changing their searches towards homes in smaller locations or on the outskirts, also encouraged by the lower prices and the possibility of continuing to work remotely in their companies," they say from SIRA.
In fact, there are studies that suggest that housing located in towns near large cities, which are in 'prime' locations, and those with good views, a garden or terrace are the types of houses that will best endure the crisis and could even revalue with a foreseeable increase in demand.
More traditional than tourist rentals
The slowdown in the arrival of tourists and the uncertainty about how long this situation could last is forcing owners and investors to look for formulas to alleviate the effects of this crisis. "It is true that since 2018 many of these owners were already considering redirecting the use of their homes to longer term rent, less penalised fiscally and much simpler and cheaper to manage, but this situation has completely precipitated this trend," the study says.
For example, many owners of tourist accommodation have landed in short-term rentals as a "survival" measure to cover the costs of mortgages and the costs of the flat. They offer contracts under the law from six months to one year, in very good locations and with very competitive prices to seduce foreign workers displaced to Spain or students.
Investors are on the lookout
The expected generalised fall in prices will coexist with an excessive demand for the most attractive homes. In fact, Toni Expósito, general manager of Comprarcasa, believes that "the good product, if it is at an adequate price, is in demand and will not take long to sell as there are already many investors and savers analysing the market", in view of the instability of the stock markets and the low profitability currently offered by financial products such as bonds or deposits.
Expósito expects that with the opening of the market there will be offers, mainly from people who need liquidity or from inheritances and accumulated supply. However, he rules out the possibility that "big deals like those from the worst years of the past crisis" could appear.