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This is the moment to “prepare the reinstatement of real estate activity”
31 March 2020 | Vanessa Sousa

Despite the uncertainty which hovers over the world, and in particular, over the real estate market, specialists are sure of one thing: nothing will be the same after the Covid-19 storm. Hence, this is the moment to «prepare the reinstatement of real estate activity».

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The real estate market’s recovery was one of the main focus for the invited speakers at the first online meeting organised by Observatório Inmobiliário, owned by Grupo Iberinmo, together with APCEspaña, "The impact of Covid-19 on real estate", which took place last Friday the 27th of March.

To ensure the real estate market activity while containing the virus spread are, according to Mariano Fuentes Sedano, in charge of Urban Development at the Municipality of Madrid, two of the main lines of action that need to be adopted right now. This means that the efforts of the Municipality are currently focused on «preparing the reinstatement of real estate activity» and, thus, «continue all the licensing processes so they can be free after the crisis».

President of the Spanish Association of Developers and Constructors (APCEspaña) Juan Antonio Gómez-Pintado assured that the sector’s activity has continued. In Madrid between 70 % and 80 % of projects remained active during the first week of the state of emergency. And in other locations across the country changes in terms of activity «were almost unnoticeable». But he also admits that «the impact is a little bigger in Madrid and also in Barcelona».

Leticia Ponz, vice-president at WIRES, admits to being «concerned» about the sector’s current state, for mainly two reasons: first «there are segments which have practically stopped», such as retail, hotels and offices, and companies need to «take many decisions very quickly in circumstances which until now were unknown». But she recognises that the current crisis doesn’t affect all in the same way, since logistics, for example, has had «plenty of activity».

In order to «limit the damage on the sector to a minimum», it is needed to find «the appropriate moment to take decisions and adapt plans», argued Roger Cooke, Chairman Editorial Council at Iberian Property. And that includes «analysing the occupancy contracts, contracts with the banks and insurance contracts, to see what can be done right now», he added. The important thing, said Roger Cooke, is to «maintain the good spirits» and «be ready to fight for a quick recovery». But he warned that «it will take a lot of energy» to do it.

The truth is that «we are currently more prepared to overcome the crisis. The companies’ financial situation right now is completely different from what it was in 2008», assures Juan Antonio Gómez-Pintado. On the other hand, companies today are more capable of adapting to remote business management. Paloma Arnaiz, General Secretary at AEV (Spanish Association of Value Analysis), recalls that there are measures in place to «improve the companies’ efficiency and productivity», by adopting safe remote management, business control, communication and support tools. And this is one of the main factors which will allow for the activity to continue, albeit remotely and with some limitations.

The sector’s recovery, according to Paloma Arnaiz, will depend mainly on two key factors: the level of unemployment and the developers and construction companies’ resilience when faced with frozen sales and a likely price drop.

For José María García Gómez, General Manager for Housing and Rehabilitation at the Madrid Municipality, the set of existing public-private partnerships are a «strong element for the economic and social recovery». These are «crucial, to help families affected by the pandemic», added Mariano Fuentes Sedano.

On this scenario, Carlos Portocarrero, Head of Real Estate at Clifford Chance, goes even further, believing that with the future recovery we will be faced, on the long-term, with a «golden age», since there will a be great liquidity on the market and hence many operations. Ricardo Sousa, Century 21’s CEO, further remarked that despite the postponing of purchasing decisions, they are still on the table. And although the offer has stabilised this month, demand is still there.