So what will happen in the real estate market? The million dollar question, what will happen in the real estate market? And I'm from…
So what will happen in the real estate market?
The million dollar question, what will happen in the real estate market? And I warn in advance, the above are on my mind only from my many years of acquaintance with the industry, needs, capabilities, active institutions and bodies, government and most importantly the people who run and operate in the industry.
I will try to include everything briefly and hope you do not see things as a stupid prophecy, but an attempt at 'intelligent guessing', at a time when the health and perhaps even greatest economic crisis the country has known since its inception is still muscular, with over a million unemployed (25% of the labor force).
In order for us to create an orderly Torah, I think it should be divided into 6 parts.
Division by 2 in the timeline - end of a health crisis within a month and within 3 months or more (and it will be emphasized that the periods I set will be measured from 1.4.20).
Division into 3 types of properties - new residence, second-hand and income-producing residence. In this regard, it is important to note that the shortcoming requires the real estate market to be treated as one market and not the other.
I will try to include everything briefly and hope you do not see things as a stupid prophecy, but an attempt at 'intelligent guessing', at a time when the health and perhaps even greatest economic crisis the country has known since its inception is still muscular, with over a million unemployed (25% of the labor force).
In order for us to create an orderly Torah, I think it should be divided into 6 parts.
Division by 2 in the timeline - end of a health crisis within a month and within 3 months or more (and it will be emphasized that the periods I set will be measured from 1.4.20).
Division into 3 types of properties - new residence, second-hand and income-producing residence. In this regard, it is important to note that the shortcoming requires the real estate market to be treated as one market and not the other.
Having created the 6 main subcategories, we will now try to deal with what is expected of us in each: -
End of the crisis within a month (return to relative routine on 1.5.20): -
New residence - A decrease in the short term, of several months, up to 10% on average in prices, followed by a rapid correction to a more or less common price level in the market.
Explanation: The new construction market has been severely but not severely damaged, companies will be able to recover with the help of banks that will support a reasonable discount policy and give air to breathing for companies to recover. In contrast, construction starts are expected to fall dramatically in 2020 and reality seekers (casualties of the capital market) will help to maintain a market at a minimum level, at least initially.
Residential Hand 2 - Decrease in the short term in a minority of transactions, up to 15% followed by a rapid correction with increases in certain areas.
Explanation: In the first stage, only those who owe will sell and the market will be characterized by a minority of transactions and cheaper prices. Later on, the laws of supply and demand will return to power, so we will even see price increases in some areas. The rental market will support the above trends when 80% of the laid off will return to hold jobs and as a result they will renew / continue new / existing leases.
Explanation: In the first stage, only those who owe will sell and the market will be characterized by a minority of transactions and cheaper prices. Later on, the laws of supply and demand will return to power, so we will even see price increases in some areas. The rental market will support the above trends when 80% of the laid off will return to hold jobs and as a result they will renew / continue new / existing leases.
Yields - A bleeding market that has gone through the most severe trauma and will bleed for quite some time. This is especially true for small office space.
Explanation: Big companies will return to work from their offices, however, small businesses, startups and others who can continue to save and work from home will do so. In the shops and malls arena, there will be an adjustment that will take a considerable period of time for the economic capabilities that have shrunk among the public. Sheltered housing will wait for vaccination.
Explanation: Big companies will return to work from their offices, however, small businesses, startups and others who can continue to save and work from home will do so. In the shops and malls arena, there will be an adjustment that will take a considerable period of time for the economic capabilities that have shrunk among the public. Sheltered housing will wait for vaccination.
End of crisis in 3 months (return to relative routine from 1.7.20): -
New residence - With the expected collapse of medium and small companies, we will see more new apartments on the market at conference prices. Our strong and large banks will also want to meet with cash and especially in view of the large volumes of real estate that will be transferred to them. Combined with an economy entering a deep recession, the real estate market is expected to have a long recovery period of several years.
Price declines will be at high rates and buying will be mainly strong and liquid.
Price declines will be at high rates and buying will be mainly strong and liquid.
Residential Hand 2 - Also in this market we see many more cases of insolvency combined with people realizing assets in favor of cheaper housing solutions and the need to be liquid. This trend will to some extent help apartment prices in peripheral areas that will maintain more reasonable price levels, but for a relatively long period the market will be characterized by severe and inconsistent volatility and volatility. The rental market will also suffer from volatility, which will mainly stem from job insecurity, which will account for about half of the labor market.
Yields - This market will be hit at a level that will require decision makers to create creative solutions such as changing the designation of residential office buildings, etc. The plague is with us for a long time to come in this case and therefore, technological solutions will leave vast occupational areas in favor of cyberspace. This market will require a re-examination and an answer to the question - what are we doing in the meantime - until the world returns to sanity.
A gloomy outlook? Not necessarily, depending on which side of the stick you hold.
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