The real estate industry is at a breaking point currently. A sector that has been hard hit by the world’s lockdown is now trying to emerge again with all the difficulties caused by an unstable market with far fewer guarantees within finance and lending procedures.
Let’s find out how companies and agencies will be able to survive the pandemic and what are the steps to approach a busy (but still incredibly relevant) business sector in 2020.
The Starting Point
Paul Kennedy said real estate has already weathered a storm during the Covid-19 downturn and any postponing of recovery could create further damage. ‘A delayed return to normalcy would have a larger effect on real estate fundamentals,’ he said.
‘Including rent growth expectations and risk spreads, possibly causing property prices to fall by 10% (or more) during the crisis period, with results varying by market and sector. Once there are clear signs that the crisis is ending, a relatively rapid reversal of price impacts is likely.’
The future of the real estate sector, therefore, will most definitely kick off in 2020 with a net decrease in entrances and figures, but companies who work within quick return sectors like commercial property auctions and residential property auctions will most definitely see a great year ahead.
Following Kennedy’s report
Kennedy assured that the real legacy of the pandemic will be driven by how different regions respond and recover. This is an important aspect for investors to be aware of, as real estate will not function as a regionally homogeneous asset class.
‘Success will depend on institutional investors’ willingness and ability to seek exposure before there’s absolute clarity. In a “checkmark” economic recovery scenario, which seems increasingly likely, there should be near-term opportunities to acquire high-quality equity and debt real estate assets at attractive pricing.
It’s super important, in fact, to understand the element that triggers changes within this sector. In the vast majority of times, in fact, the digitalisation within the field is becoming extremely impactful and it is, therefore, mandatory to acknowledge the impact of digital channels in regards to the correct performance of your overall business architecture.
The business world is definitely facing a number of struggles at the moment and it is definitely very likely to see further decreases in the first part of 2021. Businesses which will embrace the world of technology are the ones which are likely to survive the post-pandemic real estate world.