Property / RealEstate / Sales · October 29, 2021

Buy and sell apartment in times of coronavirus

Being home today has taken on a different meaning, not only for each of us as individuals, but also for industries. Staying in isolation for a long period has many consequences for the economy, especially for companies that require face-to-face processes and transactions like ours: real estate.

Buying or selling an apartment, house or any property in times of coronavirus will be a difficult but not impossible task. In this post we will tell you how this pandemic will change the dynamics in the world of real estate and some forecasts of what will happen in the real estate market, keep reading!

What is happening today?

There are 203 countries, areas and territories affected by the coronavirus, in some of them there are still few cases compared to China, the genesis of this pandemic. However, governments have decided to take measures with the intention of flattening the growth curves and reducing the chances of contagion among citizens. Some of them have been border closures and mandatory isolations, causing economic and social dynamics at the national and international level to change.

The economy is contracted and many companies have had to slow down and even shut down their operations, resulting in a drop in their income and therefore the inability to pay their employees. Layoffs and uncertainty in households increase, while the growth rate of countries falls.

With the aim of cushioning the impact on the economy and helping people, multiple measures have been implemented around the world. The governments of the richest countries like the US and England have launched unprecedented aid packages to save their economies, including: lowering interest rates, loans to the private sector and even giving money to the population for face the crisis. Developing countries like Colombia are making enormous efforts to give some stability to the market, but they do not have the same amount of resources. Below we summarize some of the measures:

  • $ 70 billion in credits for different sectors of the economy and protect employment . Of this total, $ 20 billion will be allocated to micro, small and medium enterprises.
  • Incentives from the Familias en Acción program have been given throughout the country to 2,391,882 families so that they can face compulsory isolation. This program may be extended to more people in the informal sector.
  • The withdrawal of partial or total unemployment was enabled . Normally, unemployment can only be withdrawn for the purchase of housing or education, but with this emergency the Government enabled retirement to face the crisis.
  • The financial sector has also responded, and most banks have made it possible to postpone the payment of loan installments and reduce the collection of some commissions . This will be especially important for those who have a home on credit and who are in difficulties at this time.

Even if governments have taken steps to protect individuals and businesses, it is everyone’s job to reinvent themselves, be austere, negotiate benefits with creditors, and remain calm.

The real estate industry in times of coronavirus

As you well know, many companies have fallen and with the passing of the pandemic they will fall more, especially those that require their clients to carry out processes, trips and face-to-face transactions, such as those in the real estate sector.

If people cannot go out, they cannot visit properties for sale, go to notaries, do legal proceedings, move or remodel. In addition, it is very likely that banks will become more strict in granting new loans and this will reduce the number of buyers. It is also possible that some buyers put off buying their home, preferring to have liquidity in this time of high uncertainty. All this will reduce the number of buyers, and therefore, the number of real estate transactions.

Understanding what happens

Only until mid-April and during the month of May, when the indicators show the behavior of the market, will it be possible to have more accurate predictions; meanwhile, buying or selling an apartment will be a process with a high degree of uncertainty.

In order to begin to draw conclusions in these first days of isolation, to help you and those who work in the union to make better decisions, we conducted a survey of more than 160 people in the industry , including independent agents, builders and real estate agents.

With this survey, started on March 24, 2020, we wanted to know what they think and how real estate businesses in Colombia are doing in this phase of COVID-19. The data that we will show below is partial as of the publication date of this article, to consult the updated results, you can click here .

This is how real estate agents think in the midst of the crisis:

To get an idea of ​​what could happen in the country, let’s take China as a precedent, home sales fell by 90% in January and February , a figure that is not far from the results of the survey:

92.5% of those surveyed affirmed that sales requests have decreased and 92.5% that purchase requests have also decreased.

Possible effects on the purchase and sale of housing

Selling an apartment will be uncertain during this period, not only due to the impossibility of receiving visits from buyers, but also due to the position of the banks in this situation. The banking sector is being cautious in its measurements due to the risk and uncertainty that exists, which could lead to mortgage loans being reduced and people not having how to finance the purchase of a new home.

65% of those surveyed think that purchasing processes for housing purposes will decrease, but 30% think that it will remain the same. 

Nobody knows how far this housing paralysis will go, the truth is that at the moment people will lose interest in the “second home” or “vacation homes” , these luxury segments will surely be the most affected.

An investment opportunity 

Investors are expected to eliminate their investments in fixed or variable income funds, to invest in safe assets such as the purchase of dollars, euros and real estate. Investment in the real estate sector will always be more stable since its profitability does not usually fall as in other types of investments.

Buying property in the midst of this crisis for investment purposes can be a business with a good future. Prices will fall and supply will increase as many will need to have liquidity and pay off debts.

Although so far only 20% of those surveyed report that some of their clients decided to lower the price due to the current situation, if the situation worsens, 50% of those surveyed would recommend that their clients lower the price of real estate. This could lead to faster sales and reduce market illiquidity a bit.

Since we cannot stop, we must change …

Real estate dynamics are forced to change their strategy. It is important that quick measures are taken to respond to the processes that were in progress, that they are simple and easy to understand so that everyone has access and that they allow to operate in a world that will continue with isolation measures, offering comfort to provide a good experience. How can all this be done? With technology.

Many real estate companies have opted for technological assistance in order to continue carrying out their processes. For example, some have enabled virtual visits to properties and others have increased the online schedule, as they consider that the high demand for the internet in these days of isolation will allow more people to get to know their properties.

Businesses that use technology as their main tool before this juncture will be preferred by customers. Some of them are digital buyers or iBuyers , companies that through predictive pricing models, online platforms and process simplification, buy and sell properties in reduced times.

Selling an apartment in the middle of this crisis will be easy in Bogotá thanks to Habi, the first digital buyer in the country.

1. When you start a sales process with us, you can be sure that the visits to your property are over, so you will be safer and comply with social isolation. Just one visit is enough for us to continue the process , determine a price by comparing your property with similar properties through Artificial Intelligence and make you an offer.

2. At Habi we are buyers and real estate experts at the same time, that is why in the transactions we carry out we do not require intermediaries , which allows us to make a direct purchase.

3. Another great benefit of selling to Habi is that you should not make repairs , we take care of them, thus avoiding technical personnel such as plumbers, construction foremen or carpenters, from having to enter your home, putting the well-being of all at risk. and breaching isolation.

4. Doing real estate business with a digital buyer like Habi reduces the sales time from 14 months or more given the contingency to 10 days *, simplifies the paperwork process and offers you the liquidity you need thanks to the cash payment.

Habi buys properties to remodel them and put them back on the market at a competitive price. You can visit a Habi apartment without leaving home, we have a 360 ° viewing tool that brings you closer to the reality of the apartment and its dimensions.

For us ” being at home ” is not a limitation, it is the opportunity to create and develop technological real estate products that help people buy and sell properties.