Last year the previsions were quite serene in the real estate market. But Covid-19 has shaken the serenity in the price of housing. With the outbreak of the pandemic situation, the expected slow decline has accelerated. According to the last data, the forecasts for 2021 anticipate a fall in large urban environments with greater tourism dependence.
Overall, compared with the original forecasts, the price of housing is expected to be readjusted by 4%. If 2020 expected one of the highest ratings, with an increase of 5%, after Covid-19, has dropped to 0,2%. More in detail, the ratio has changed from a 5,5% growth in Barcelona to a decrease of 1,1%. On the other hand, in Madrid, the change is more subtle. The ratio has changed from 6,4% growth to a much more moderate growth of 0,8%.
But if there is no news in the socio-economic context, the price of residential assets will stabilize in 2022. And, in the meantime, new solutions and trends are going to lead in real estate.
The beginning of a new rent-era
Rent is recovering and in good shape. Just in Barcelona, rent increases by 3,1% quarterly. The Barcelona rental market shows signs of improvement after registering an average lease of 980 euros per month in the third quarter, 3.1% more than in the previous quarter. And what is more relevant, prime residential is one of the main assets in the rental market. According to the data, prices will remain stable until the end of the year and in the main cities will increase by 2% in 2021.
That is not a coincidence. Cities such as London, Paris, Madrid, Berlin, or Barcelona will register a substantial recovery due to a combination of factors. On one side, the measures applied to mitigate the impact, and, on another side, the capability to provide flexible and accurate solutions to establish a strong relationship with the community and the users is just what the sector needs right now. “Prime” rent represents a great opportunity adapted to the current needs of the future tenants, as a solution to the real estate demand that cannot afford to buy a home.
But this solution is not exempt from risks. To put some examples on the table, the end of many economic measures to alleviate the pandemic effects, the absence of young international students and professions, and the drop in vacation rentals will be some of the main issues to face in the next months. How are going to be treated, is just a matter of time.