A few weeks ago we discussed in our blog the changes that space has undergone in our daily lives. Thanks to new technologies, many activities that were tied in a certain way to certain places are not today. In addition, the economic impact of the health crisis caused by SarsCov2 has driven some transformations in the real estate market that it is worth evaluating if the latter affects your sector in one way or another.
- Increase in supply. An increase in vacant buildings has been observed in large cities. The reasons are various. Among them are that some tenants could not continue paying their rents and had to hand over the keys to their landlords. Others managed to continue in their jobs, but migrated to other destinations that offered them a better quality of life. This phenomenon is very interesting since it is possible that it continues over time and due to this it redefines characteristics of other areas such as markets and the neighborhood.
- Reduction in the size of the dwellings. Real estate developments have arrived in Latin America that sacrifice private space in favor of adding amenities to housing complexes and being close to the work and entertainment centers most demanded by buyers. In Mexico City, apartments of little more than 215ft2 are offered in central areas of the city, ensuring in their promise of sale a fast and great capital gain.
- Social demand for regulations to the real estate market. In several countries around the world, various groups have raised their voices to ask the authorities to regulate transactions between tenants and landlords. One of the causes of this claim and that some media have collected is that several landlords have requested the eviction of their properties despite the severity of the income crisis for several families. The lack or deficiency of a clear legal framework that defines the rights and obligations among those interested in offering and obtaining an income has caused annoyance in some sectors.
- Prices do not correspond to the behavior of the supply. In general terms, the law of supply and demand indicates that the higher the supply the price falls to encourage people to buy a good or service with excess inventory. Despite the increase in the supply of real estate, rental prices in several cities, far from falling, remain at levels prior to the health contingency.
- People with resources invest in real estate. It is not an open secret that many people are looking for assets in which to shelter their capital from the volatile economic scenario in which we live. As such, it is not uncommon for a segment of people to be purchasing real estate in order to earn rental income or waiting to be able to resell at another time. This practice has some implications, such as the maintenance of rent prices since several home buyers acquire these assets thanks to mortgage loans.
As we have pointed out on other occasions, these trends are general. Each country or city will present particularities of these phenomena and will even show other situations that we have not listed here. For this reason, market research reaffirms its role as an investment that allows to base response plans in order to offer people the products they will need in the near future.
The transformations unleashed by the COVID-19 pandemic are still ongoing. No one knows for sure when people will finish recovering after long months of adverse circumstances that few expected. At Acertiva we know about these concerns. We are at your service to help your company better understand this ever-changing environment. Tell us your needs and we will tell you how we can help you write your next success story.