THE EFFECT OF THE CORONAVIRUS ON THE REAL ESTATE MARKET
First things first, let’s just clarify that we monitor the real estate market of Gran Canaria.
However, it’s more than likely that all 7 islands will face similar problems. We’d like to offer you an insight into the real estate market of the island.
You can read below how the coronavirus has effected the real estate market here. Let’s get started.
Everyday life
Once the coronavirus has ‘broken into’ Gran Canaria, the islanders and tourists were surprised. What’s more, the majority of tourists are Scandinavians, who usually spend the winter here from November to April, meaning they stay for a long period, and they mostly consist of retired people above 60.
Days went by and we got more and more news.
These news were mostly telling people that the coronavirus ‘dislikes’ temperatures above 20 Celsius and the virus dies from warm temperatures.
A few days later, it was announced that they found an infected person in a hotel in Tenerife, so the whole hotel got quarantined.
This hotel was under quarantine for nearly 2 weeks, local newspapers and TV stations were always talking about it. This is when people started to take things a little more seriously as things really sped up from this point.
A few weeks passed and many people gave up on staying on the island for a longer period.
More and more people decided to travel back home and leave their winter vacation. This decision was also supported by the local authorities that started to introduce harsh regulations.
A 2-week curfew was introduced, and this was extended by another 4 weeks (at the time of writing this article, we are still under curfew). This curfew is very strict as you can only go out to get groceries or medicine.
Only one person can go out per household. You need a certificate for going to work. The roads are full of police and military checkpoints, and if you disobey the rules, you will be fined. Hotels, shops and most things closed and the tourists left.
The whole island is ‘staying still’, there’s minimal movement on the streets. People self-isolate in their homes.
The state of the real estate market for renting and buying or selling
People in the market react differently to this situation. There are people that ignore it while others try to adapt. So there are two types of property owners.
‘I’ll wait for it to end’
There are property owners that say this coronavirus panic will be over soon so they refuse to decrease the price of rent.
However, we can say that short term renting has ‘stopped’. Currently, only locals live on the island, foreigners that are here (including us) actually live here.
This means that there’s no market for short term renting. If you want to rent out something for a longer period, let’s say 6 months, you may have better luck.
‘I try to adapt’
The other type of owners try to adapt to the current market situation and decrease prices. It’s highly likely that they’ll be the ones with higher income by the end of the year.
They usually reduce prices by 5% to 30%, which is still better than no revenue at all. However, they don’t have a lot of time as the demand is small due to the limited population of the island.
Buying and selling property
Buying or selling property has stopped altogether due to the curfew.
Supply is still present, but demand has ceased to exist. Real estate prices are stagnating and everyone’s waiting. Decreasing price is not recommended, as the price isn’t what made the demand virtually nonexistent.
Summary
The supply of people looking to rent a property has significantly decreased due to the current situation of the population.
If you’re looking to make some profit and minimize your losses, we advise you to lower prices so that people will rent from you.
In addition, if you’re looking to buy a property, we advise you to wait as prices will probably be better once the coronavirus is gone.