It has been a tough three months for the world. With more and more people dying every day from the deadly Coronavirus (COVID)-19, it seems hard to see the light at the end of the tunnel. Will the curve finally flatten? How will the people and the economy survive?
In Edmonton, aside from the social distancing and limited travel hour policies, what’s been keeping people busy is finding out whether or not the value of homes will depreciate because of COVID. In the past years, Edmonton saw a sharp increase in the number of new residents moving in the city with the help of residential movers in Edmonton.
Now, residents are wondering if the value of the real estate in their area will be affected. If you search online for the most asked questions about COVID-19, you’ll find out that the question of how COVID-19 affects house prices is part of the list.
To answer that question: nothing is guaranteed, but the bottom line is prices of real estate will really go down. Before the outbreak, people were talking about how the property market has been gaining momentum.
The ease in credit conditions and interest cuts from the previous year contributed to such momentum. But everything changed when coronavirus joined the story.
Stimulus packages and rate cuts
After the news about the virus broke, the Reserve Bank immediately cut rates. In itself, such an act is positive for the real estate market since it will either raise the prices or stabilize it. However, the reason behind such cutting is adversely affecting the world’s economy.
The even sadder thing is we can’t do anything about it. We can’t escape this fact. The government may have released a few stimulus packages as precursors to more fiscal stimulus, but the governments’ hands are tied. Employment levels will be antagonized. This, along with the other repercussions, will be a short but sharp economic shocker.
Though people are expecting a rebound next year, as of now, everyone will be hurt. There are various economic sectors wherein people will lose their jobs. It’s fair to conclude that indeed, the coronavirus is breeding more uncertainty in the communities, and consequently, into the global economy.
When it comes to the housing market, the endpoint is there will be an increase in the number of buyer pullbacks. All of these will retrieve the momentum from the real estate market, causing prices to fall.
The weakness caused by coronavirus to the economy and communities will emphasize the downward pressure on short term rentals. This is something that real estate investors should take seriously.
If these prices fall, these investors might be in an advantaged position to buy, create, or merely add to their existing real estate portfolio. However, the real factor here is the weakness when it comes to rents that have been going on for quite some time without any hint of going away anytime soon.
Will there be a rebound next year?
The truth of the matter is, with all the things that have been happening this year, 2021 will be a tough time for the global economy. There have been growing talks about the recession. And though some of the key industry players will not be laying off people, their smaller business counterparts are in danger of facing low to zero revenue.
In the end, they might run out of options. With this said, experts believe that the financial capacity of both medium and small-sized ventures will be adversely affected.
The truth may be a bitter pill to swallow, but (at least) it gives us a better view of what lies ahead. These insights can allow us to align our priorities, improve our finances, and get through these challenges unscathed. Sooner, we’ll see a world that’s free of this deadly virus and one with a thriving real estate industry.