aarushiy | |

The global shutdown in response to the coronavirus pandemic is going to have big effects on property markets worldwide. In the wake of the 2008/2009 global real estate crash, some countries — including Spain, Ireland, and Costa Rica, for example — saw property prices fall by as much as 70% or more. Those bonafide collapses were thanks to bubble pricing and over-lending. Markets with less leverage at work—Panama was the best example—saw far lesser drops in values and quicker recoveries.

What’s going to happen this time?

“Survivalist” Markets

Every property market worldwide will be affected by the pandemic crisis but not all negatively. The “survivalist” market—for properties in places where you could live comfortably off-grid and self-sufficiently—will become more sought-after than ever and therefore more valuable.

Brand-name Markets

Thinking long term, the world’s brand-name markets will be least impacted. Long term, a Paris rental property will always find a renter. Even though this top-tier rental market will also take a short-term hit.

Before the quarantine, prices in Paris were soaring. Thanks largely to Brexit pushing trickles of financial industry workers from the City of London to the City of Light. Few listings have been withdrawn during the extended lockdown, but very few new properties have come onto the market. When Paris reopens, however, there will be a surge of new listings, creating a short-term softening and a buyer’s market window.

Vacation Rental Markets

Hardest hit will be second-home apartment and beach-home villas. These will collapse in the immediate term. At the top of this list are markets like Cancún and Playa del Carmen, Mexico, where zero tourist traffic will kill rental returns and lead to depreciating values of 50%.

RELATED POST  Covid boosts price of private islands

High-density cities, likewise, will see collapses in their property markets, as well, as demand across the board—residential, tourist, and commercial—will diminish. Think Rio de Janeiro.

Vacation and second-home markets, in general, will rebound slowly. Interest will pick up as air travel returns. But it will take 5 to 10 years for meaningful recoveries in some cases. As these markets will be hardest hit, they’re the places to shop for crisis-level bargains. Just be prepared to invest for the long term, and, very important, buy in a place where you’d enjoy owning and want to spend time.

Livable Low-density Cities 

The world’s most livable cities with modest to small populations will recover quickly and see booms as people look for options for reinvention and starting over in locations that offer a good and affordable quality of life and relative safety from a new pandemic. The possibility of another COVID-19 crisis will be on all our minds for a long time. Thus, small cities and rural areas offering the possibility for an appealing yet physically distanced living will enjoy growing demand. Bristol in the UK, Boulder in the US, Medellin, Colombia, and Cuenca, Ecuador, are good examples.

For more stories from off-grid.net search here

Our Our fastest solar ovenBake, roast or steam a meal for two people in minutes, reaching up to 550°F (290°C). GoSun Sport sets the bar for portable solar stoves.

Buy our book - OFF THE GRID - a tour of American off-grid places and people written by Nick Rosen, editor of the off-grid.net web site

2 Responses to “Global Property Markets After COVID”

  1. Linda Beamish

    Global Property Markets After COVID19 (?)
    This 2020 vision was (basically) prophesied in 2002.

    We studied the property market on the HNC in Building Studies (2001-2003), and – while it may not have been completely transparent what the property market vales would be after COVID – it was obvious looking at the figures, that something truly dire was going to occur.

    In fact, in 2002, we were delivered a prophecy the likes of which were damming not only to the entire construction sector (in which most students worked) – but also the whole financial sector in total.

    At the time, the property market was booming – house prices were going through the roof, and land prices too – investment was ‘all there’ and it wasn’t even possible to go a day without seeing more advertisements for second or multiple mortgages for home owners to gain property folios, or to see documentaries on people who were making a killing buying derelict property or land, doing it up or re-building and making massive profits.

    What wasn’t seen so much, was that far too many new landlords had no training in how to become good landlords – and far too many tenants were finding it difficult to keep up with rising rents and living costs – wages were not keeping in line with inflation, and it was causing serious problems for thousands of people in the UK, (and was even worse for far too many overseas).

    Poverty was a (very) real problem, both in terms of economic poverty, but also in terms of ecological poverty – in fact, as students continuing professional development, we were all taught of the need for sustainable development, (and for ethical trading practices), within the construction sector, to work to the highest build code standards (namely build code ‘Level 6’+) in sustainability.

    Although this may have been somewhat ‘off-syllabus’, at the time of the prophecy, the UK Taxpayers funding and expenditure was broken down, where approximately one-third of the population was of working age or able to work, one third were too young, and one third were pensioners.

    The taxes of the one third of the population who could work, were then supposed to cover the costs of running the Welfare State, the NHS, (to provide Free Legal Aid), Education, (as well as the Fire, Police, and emergency services), the Armed Forces, numerous Local Authorities and Government departments – as well as the Royal Family.

    As the property market was positively booming at the time (in 2002), it meant that soon, the bubble would burst – how long it would take was impossible to see, but what could be seen (even then) was that the longer it was before the first wave of recession hit, the worse the sum of UK debt would be incurred – IF the government simply bailed out the bankers as they had in previous boom-bust times, (and IF the governments bailed out the bankers WITHOUT putting controls in place or kerbing their over-sale of debt, then the resulting effects of the second wave of recession could well be completely devastating globally).

    And, of course, that’s exactly what happened!

    At the time – when looking at the second wave of recession – our lecturer said, (based on historical choices), it could easily lead the world into WWIII, nuclear war, (or even bio-terrorism).

    In the past, global recessions have been ‘eased’ through war – allowing western governments (primarily) the opportunity of gaining more land and resources to off-set their balance of deficit – however, the sums involved now, were far (FAR) bigger than ever before, (and global resources had already been raped, devastated by infernal greed, and the desire to amass massive profits).

    In short, the second wave of recession – when it came – would be far (FAR) worse than any recession that the world had ever seen before.

    As we had been party to this off-syllabus prophecy, it led me to watch the financial situation in search of the signs we had been advised to look for – and, sure enough, last year (in 2019), one bank went under (completely), one was taken over, and another (the HSBC) was forced to close numerous branches (and hundreds of staff in the process).

    Added to which, the stock-exchange had started to wobble just before COVID too – so we were all sitting on the brink of recession – when COVID occurred.

    The prophecy was inconclusive as to what would actually come out the other side of the recession, (which I may refer to as, in truth, nothing will be ‘the same’ as it was before COVID afterwards).

    Looking at the latest reports, it would appear that the housing market is starting to shift, with queues of people anxious to move house, with property prices lower than they have been for years – however, land prices no seemingly dropped in line with this, and with rental properties still having rent rises even through COVID (even via Housing Associations).

    One report stated that the evidence seemed to show that (a) more people from cities and towns were looking to relocate rurally now (or at least, after COVID), and that (b), after so many had been forced to work from home through isolation, many had realised that they could balance their work and family lives better, and were looking to continue after COVID.

    In effect, this will allow many home-owners a cash bonus on the sale of their town or city property, to move to more rural areas, and to continue to work from home there.

    The knock-on effect of this will be even more devastating to rural areas – already having far too few jobs and far too many people seeking work, (themselves often forced to move to towns and cities, leaving their families behind them, and sadly all to often without family support, again dependent upon the Welfare State and the NHS).

    As discussed in the lecture room, this situation – and the cuts which would result from (even) the first wave of the recession – could well lead the UK into a situation that was untenable in terms of complying with Human Rights Laws introduced from the end of WWII.

    People had rights to free Education, free Healthcare, (free Dentistry), to free Law services (and protection), as well as expecting public services to work for them, to be there for them if their house caught fire, flooded, or they were burgled, etc., (and it appeared from the figures, that I would be neigh on impossible to continue to provide these services after bailing the bankers in the first wave of the recession).

    People’s rights were already uneven – excluded groups were already excluded from many of the services which were provided to others – partly due to their Postal Codes, (and the lottery demographically).

    There were already far to many people living in poverty (and in child poverty) in the UK – and not solely those who were not working – the self-employed were also amongst those groups which far too many parties excluded over the years anyway.

    But it was going to get worse – far (FAR) worse – the prophecy was SO stark – it was dire.

    As far as our lecturer could see, there would be two paths ‘we’ could go down, (admitting that we may not have too much control over one of them).

    Either, the banking fraternity, ‘The City’, the Cabal, (etc.), would continue to put all financial reserves and investment into the technology markets, (the unsustainable manufacturing sectors), AI, and more – OR, we could look for an alternative future.

    In terms of what the highest possible achievable design might be for ‘sustainability’, (if I wanted to achieve the most perfect design, what would I need to aim for), I asked – to which, after a few moments thought, I was informed “a ship in a bottle’, (in other words, completely ‘off-grid’ then)!

    Similarly, in terms of the most sustainable construction material, we were taught of the need to focus on the materials that might be found on the site, (on any site), or at least local to that site, which would either be easily replaceable, and/or to specify the use of waste materials, upcycling materials, and incorporating those in our designs too.

    The exemplar it was suggested we refer to was http://www.cat.org (CAT Ecovillage), which our lecturer said was the best example he could think of – but there were many others, and we needed to research further.

    That, and the attendance of ‘Green Build’ and other exhibitions, (plus a lifetime as an environmentalist), led me to see a clear vision for the future ‘off-grid’, however, the problem was (as it has been for all the centuries at least since the Doomsday Book cast land-ownership in stone), that finding land (for those who really wanted and/or needed it) was a serious problem, (even pre-COVID).

    Although, in theory, Councils are supposed to have set aside Exemption and Exception Sites – for Community Land Trusts (CLTs) for intentional communities ‘Right to Build’, (Right to Bid), and especially for all those with ‘proven need’ (i.e. those suffering from exclusion) – that has not happened. (There are no local authorities that I know of so far with ‘land lists’ for either Exemption or Exception sites – where, in fact, far too many LAs are in denial of the levels of poverty and abject austerity on their own doorsteps.)

    Thank God for LandBuddy listings now being formed at Off-Grid.net 

    In conclusion, in theory, the time is right NOW to reset the clock anyway.

    The banking system has been proven to fail repeatedly – with further land grabs and over-inflated stock values also repeating historically – and, with the global debt mountain almost trebled from the 2002 prophecy to the 2008 recession, (let alone the current economic situation through COVID), there is simply no way on Earth that the Taxpayers can (or should) be expected to off-set the bankers (or governmental) debt.

    What should really happen at this juncture, is a complete review of the economic systems that have failed the people – and the opportunity which so many people need to live ‘green’, to live ‘Off-Grid’, in autonomous communities, (or even alone).

    In short, there are two paths we can go down today, one is to continue as if there is nothing wrong with the system that keeps breaking (and end up living in a world similar to ‘1984’ – the other, is to look to the future through green eyes – to allow people the opportunity they need to live without poverty or austerity, to grow their own organic food, live in their own eco-homes, and make their own bio-gas, electricity, and (pure) water, (without needing to claim any form of welfare state benefits, freeing up ££Millions in Taxpayers funds, for the NHS, Dentistry, Education, free Legal Aid, and more).

    If the world takes the first route, then God help us all – because the picture is as ‘bleak as hell’ (quite literally).

    If we are able to live sustainably and off-grid, living light on the land – regenerating the land following basic Permaculture principals, then we have a chance, (and so do our children and future generations).

    So, if you are a landowner, and are aware of the problems facing far too many people and families today – and are sympathetic to the cause, (or might benefit yourself by having more organic hands-on-deck in exchange), please contact LandBuddy at https://www.off-grid.net and let people know, (there are many ways that contracts could be formed, some people who want to live off-grid have money to buy the land, or to rent the land, or to work part-time in exchange for the opportunity of living on the land while they do so – or, as the UK government allocated funds for CLTs, these funds could be used for the land in exchange, at least in areas where Local Authorities have funds for CLTs).

    Ultimately, it all depends on whether land is a financial asset – or a Life Asset – and, the choice should realistically be ours today.

    Reply
  2. Gen Agustsson

    no rent, no mortage!

    Reply