Capilex

Coronacrisis affects property market, but also creates opportunities

Asset Management / Mortgages

We’re living in turbulent times. The coronavirus outbreak is turning the whole world upside down. It’s no accident that Dutch Prime Minister Mark Rutte stated during his press conference on 20 March that corona is causing the biggest crisis since the Second World War. The impact on health care and the economy is already enormous, and no one knows what the future holds. The impact on the real estate market is also uncertain, although the situation now remains stable.

Many people are worried about a possible recession. There are fears that the housing market will be hit hard by the coronacrisis, and that people will no longer be able to buy a house. However, as psychologist Abraham Maslow demonstrated as early as 1943 with his famous pyramid, housing is a basic human need. First, according to him, man has physical needs, such as food, drink and sleep, followed by the need for safety and security, including housing. So people spend money on that before they start satisfying their other needs.

Ongoing high demand
And the signals from the market do indeed support that view. Demand for property remains high, realtors tell us. Owner-occupied properties are as popular as ever, but a different approach is being adopted. For example, there are fewer personal viewings, but more digital options are being deployed, such as remote viewings via video, Facebook or WhatsApp. The demand for rentable real estate also remains high and there is still a shortage of apartments. On the other hand, the nitrogen crisis has already hit the construction sector hard, and the coronacrisis is only exacerbating that. New projects are postponed and some of the current projects are at a standstill. This is resulting in even less supply versus ongoing high demand.

Varying responses
Investors in commercial real estate are reacting differently to the current situation. On the one hand there are investors who take a somewhat wait-and-see attitude, but there are also investors who see opportunities and want to invest in corporate mortgages right now. Moreover, the rental market for commercial real estate is still in full swing at the moment, which means that real estate can be purchased at favourable rates.

The outlook
The coronacrisis will undoubtedly have an impact – to a greater or lesser extent – on the real estate market. We are not afraid of inflation, but we do not rule out the possibility that the coronacrisis will push up prices. Nevertheless, we expect the market to stabilise eventually. In uncertain times, people are often a bit reluctant to leave their money in the bank. Real estate is then an excellent product for providing you with greater security.

Need money now?
For entrepreneurs who currently have liquidity problems, we have special bridging finance, though there are other types of financing available too. This quickly releases funds for investment, restarts or staff payments. Would you like to know more about this, or do you have any other questions? Then contact us.

Need money now?

For entrepreneurs who currently have liquidity problems, we have special bridging finance, though there are other types of financing available too. This quickly releases funds for investment, restarts or staff payments. Would you like to know more about this, or do you have any other questions? Then contact us.

Questions about this subject?