Corona virus: is the real estate bubble bursting? – Real estate market & price development

In times of the Corona virus, is the real estate bubble bursting now? Should you sell your house quickly now? “What real estate bubble”, ask again other real estate connoisseurs. Up-to-date anyhow the opinion spectrum is completely divided to the effects of the virus pandemic on the real estate market. As a regionally positioned real estate team working with absolute discretion, Lukinski provides you with up-to-date information on the different positions. Of course, as a true discreet broker, we will also tell you our own opinion on the subject of “selling a house in Corona times” and give you tips on how the wise house seller should behave at the moment.

Special: Real Estate & Corona – Updates

More articles and analysis on real estate in the Corona Crisis:

• Demand increases (Google Trends): Real estate sales
• Is the real estate bubble bursting? Price development
• Housing bubble, what does that mean?
• COVID-19: Coronavirus Meaning

Real estate market in Corona times

It is quite clear that the market for real estate is – from a business and economic perspective – a market like many others. It is driven by supply and demand and is also subject to numerous factors influencing the economy as a whole. It is therefore not surprising that the consequences of the Corona pandemic are being felt in the real estate market.

Short-time work, possible job loss, drop in oil prices, the uncertainties regarding the time after Corona: all these are factors where a majority thinks: “Buying or selling real estate is not the right time now”. Prices will fall, rental income will be lost for an indefinite period of time – no prospects for lucrative real estate deals. There are also very practical limitations. Due to the dramatically reduced contact possibilities, it is currently almost impossible to negotiate sales contracts and conclude them with a notary. Lucky who could make his sale before the crisis? From now on it’s all downhill? We at Lukinski have a differentiated opinion!

Corona Analysis 08/20 – now online

Now online – Real Estate Corona crisis: sale of house, apartment, apartment building, the demand is increasing, that show the trends. In these days many speak of the second wave, which comes now on Germany in addition, the whole world. Already at the beginning, at the beginning with the Corona Pandemie, in many economic in addition, financial messages before it warned that in the autumn a wave of the insolvencies will come on us. A logical consequence of insolvency is the loss of property, not only in the form of jewellery, cars or furnishings, of course real estate will also be affected if the rate of insolvencies in Germany increases.

The trend analysis in the field of real estate sales (08/20) deals with the increasing demand. Very directly visible, among others on the main keyword “sell property”. The charts and the review of the last 12 months can be found below. Moderately increased, on average only 2 to 3 points, are the sale of house and condominium. So there doesn’t seem to be much change in the amount of search queries here yet.

Very noticeable, on the other hand, is the trend on the topic of “selling multi-family houses”. As you will see in the individual analyses and charts, the trend is jumping upwards these days.

Now online: Real Estate Corona Analysis 08/20

Opinions are mixed

In mid-March 2020, when the pandemic had already reached the German market, no one in the real estate world saw any negative consequences for the property market. There was no talk of contact restrictions, business life was still largely normal. Only with the tightening of contact rules, the closing of public institutions such as schools, but also restaurants, etc., the tone changed. Here is a brief summary of the positions:

Corona: Property prices will fall

After prices for houses and apartments still rose by an average of 5% last year, and in some places by more than 10%, Corona will cool the market noticeably. Because:

1. Buyers fear for their jobs
2. Loss of rent for rented properties is now a real calculation factor
3. Every real estate cycle so far ends in a recession
4. A recession in the economy also affects the real estate industry
5. Share packages lose value, so there is no purchase capital for real estate
6. This particularly affects the private buyer/seller
7. Already in 2008, during the financial crisis of the Euro, the real estate market collapsed by 12%.

House price development in Germany:

You can find more statistics at Statista

Corona has no influence on property prices

Because the investment in real estate is also often referred to as “concrete gold”, the ownership of real estate proves to be valuable and unshakeable, especially in such a crisis. Regardless of whether it is owner-occupied property or a rental investment: the market for real estate will continue to boom. Because:

1. Lending rates remain at historically low levels
2. Interest rates are kept stable precisely in order to cope with crises
3. The shortage of housing in Germany persists
4. There is no real estate bubble because banks did not make loans lightly
5. Rental and owner-occupied apartments are still in high demand
6. Real estate is a long-term investment
7. Demanded residential locations continue to have stable prices

Sell house in Corona times

Despite contact restrictions and other restrictions on the movement of goods and merchandise: In Germany, some activities regarding the real estate market are still permitted! For example, owners of rentable properties are allowed to arrange viewing appointments on a limited basis. However, no mass viewings, but only individual appointments. This makes renting more difficult, but not impossible. Attention: The regulations depend on the federal state!

Read more about the current regulations when selling a house in Corona times here!

Overall, it is now for all who own a property and want to sell it: Keep calm! In addition, it is important to have the right estate agent as a partner for the sale at your side. Hiring the right real estate agent is the order of the day. Discretion in selling real estate is also very important at this time. Discreet brokers have significant advantages for the seller here!

Discreet brokers: particularly recommended in times of crisis

Discreet brokers always work “to the exclusion of the public” when selling real estate. They have access to an extensive customer file without having to advertise your property in the relevant ways. They are accustomed to carry out viewing appointments and all other activities around the house sale almost in all silence. Mass appointments, broad advertisements, etc. are not the business of the Diskret broker. Thus, he fulfils all the requirements for a sales management of real estate in times of Corona.

However, discreet real estate marketing – also referred to as “secret sale” – poses very special challenges for the real estate agent.

• The Diskret broker sells your house with absolute discretion
• The Diskret broker does without the usual Internet portals for real estate offers
• The Diskret-Makler has an extensive prospective customer file
• The discreet broker thus often ensures a faster sale of your property
• Especially when the normal distribution channel is closed.
• The discreet broker sells real estate of all types and sizes
• The Diskret broker also works when the seller lives abroad

Lukinski with its team of experts is a discreet broker in the Rhine-Main area. We also inspect properties under these special conditions and evaluate your property professionally and discreetly.