06
May

Coronavirus impact on property prices

Demand in the real estate market has slowed due to the coronavirus pandemic, but without the
impact on rising prices.
Regarding to investment properties intended for short-term leases, due to closed borders and the
absence of tourists, the result is a loss of planned income. Alternatively, a significant reduction
in income in the case of retraining for long-term leases, which cannot be rented under similar
conditions. However, with long-term leases, there is a risk of non-payment or late payment of
rent.
The above factors reduce the demand for real estate investments for rent. The result is increased
demand for solid-yielding real estate.
Before the state of emergency, demand for real estate outweighed supply.
A significant shortage of the number of apartments in the real estate market is one of the reasons
why a considerable decline in property prices cannot be expected after the end of the pandemic.
The supply of apartments will remain limited due to the slow permitting process for issuing
building permits for the construction of new real estate and the subsequent satisfaction of
demand.
In the current situation, however, a substantial part of society is dealing with revenue shortfalls
caused by a pandemic. As a result, people are losing interest in buying real estate.

However, after the end of the quarantine measures, it can be expected that the market will return
to the usual level of demand and that a significant general fall in real estate prices is not
expected. From this point of view, it is therefore possible to consider investments that are
secured by real estate to be safe.