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The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices – Part 2/2

Posted by barcelonabuyers on 8 June 2020

This is the second part of the article titled “The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices” (Part 1 here)

Analysis, updates, and predictions for the Barcelona Real Estate Market.

To recap the current situation in which we have found ourselves in Spain: on March 14th 2020, the Spanish MP ordered us to submit to a strict lockdown and, with agents and notaries unable to work, no sale operations could be completed. This confinement was extended in its most severe form until the 25th of May 2020, when some things started to go back to normal, and visits to properties were officially permitted.

The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices - Part 2/2Admittedly, even as I write on June the 5th, we are not entirely free yet. The return to normal is and will be gradual throughout this month, and, unless our “imaginative” leaders decide to pull another crowned rabbit out of their hats, we should be in sight of the finish line.

As far as travels to Spain are concerned – and they should concern the authorities very much given the importance of tourism and real estate investments in the country’s economy (and they don’t seem that much concerned, actually…) – they are restricted until the 1st of July. However, and I shall post any update thus please follow my media, there are rumours of anticipating the date for some countries. Undoubtedly, any decisions will impact the market since foreigners represent the most profitable, and the most dynamic proportion of property buyers in the coastal and touristic regions of Spain. It would be showing quite an unreasonable optimism to imagine that clients, except for those professional investors who entrust their purchases to local representatives, would agree to buy a property without first visiting it.

But this article (2nd part) is not only intended to summarise where the real estate sector stands in the context of the currently imposed limitations. As announced, I would like to answer (or at the very least, bring the necessary insight) with a list of Key Facts that I have collected and verified.

So, will there be better, or more, opportunities for investors?

Will you be able to improve on the prices of February, before the lockdown?


I have already explained in length, in the first part of this article, why the measures of restrictions, which started early March to end at the end of June, will not impact the market of real estate (in Spain, and elsewhere) as a typical financial crisis. Finances are not the cause here, but a consequence of an unusual interruption in business and employment. 

Notwithstanding, it may affect, for a while, the perceived market value. Some may shy away from the market, others may reflect on it as a second chance, especially those who were not ready or present in 2013-15.

The fact that someone has “switched off the light” for three months and then switched it on again does not change the state of things. 

Sure, the real estate sector was prevented from working. However, nothing in its mechanics, unlike in 2008 and the years that followed, has changed. There has been no major or widespread bankruptcies in the industry, and no significant quantitative or qualitative effect on mortgage applications.

The way operations are run, negotiated or financed is as it was in February. For example, although most professionals involved in purchases and sales saw their activities frozen solid, constructions and renovations never ceased. Yes, even at the worst of the measures of confinement, crews were fixing buildings and properties.

The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices - Part 2/2The properties that could not be sold are the same as earlier this year. Banks still give mortgages, and agencies are still working under the same protocols. Activities, and the associated professionals were frozen, but only for a quarter and a half. The game is not, as it may have been in the past, to look for another occupation but rather to catch up with the wasted time.

Actually, I agree with the various professionals who have claimed that, instead, this event has pushed several “old-style” agencies to reform themselves, and adapt to new means of offering their products and services. Many I know, for example, have invested in new technologies for their advertising, such as the use of interactive videos. In this grim picture, it is a welcome benefit. As with any disaster in history, the last months have also yielded some progress.


In fact, quite the contrary when it comes to professional investors. They must now accomplish in 8 months the objectives of 12… or close the gap as much as possible….

The people who have suffered most from the lockdown are those who rely on their own business (hotels, restaurants, freelance, self-employed professionals, shop owners, etc…), who have been forbidden to work for months without any (or very little) help from the state. This is especially true in a country like Spain that depends on its visitors, tourists, and investors. The related professions, and to some extent the real estate sector, have already missed the Easter holiday and Spring weekends, and are now told to wait, pending the origin countries complies, until July for customers to return.

But there remains a portion of the local population who have not been as much affected economically. These are the public workers, employees, retired people, whose jobs or pensions are sacred or were protected by some measures given to larger industries, even if partial.

Property buyers are different. 

And, whether local or foreign, they have not been exposed equally.

In the case of the most valuable properties in Spain, renovated or well located, the profile is one less vulnerable to a loss of activity. Such people, who, with the improvements we have seen in Barcelona represent a growing share of the operations, have the financial capacity to endure the pause we have experienced. They may be affected, but more delayed than deterred. Their savings are sufficient to allow to ride this interruption and maintain their lifestyle. Most are probably still able to conduct their purchase as if nothing had happened… perhaps better, with some more measure of negotiation.

How will this truly affect the demand of properties?  

The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices - Part 2/2I believe that in the short term the demand for some properties will be affected but we must, as we did for their buyers, differentiate which type of property.

In the areas where locals reside, and in areas with lower price properties, the market may slow down. People who have been more affected by the lockdown and who were planning to buy, may decide to rent for some time while their businesses restart. This market could be affected more durably well into 2021.

However, the more expensive properties, such as those ones in the centre of Barcelona, should not be particularly affected. I don’t expect a buyer who was prepared to invest a sum of 500.000 € or more to no longer being able to buy it because his or her life has been paused for 3 months. In fact, I trust that the opposite will happen. Such investors, including many from Asia, where the “de-confinement” preceded the European agenda, will be eager to buy quickly, first, because they have wasted enough time and want to move on with their plans, and second, because, they will seek to exploit the situation in their offers.


Some experts predict that a new trend will develop as a consequence of the recent lockdown. Their prediction is that, due to the experience people just went through, some are considering a change of life. They may decide to sell their flat in the city to move to the country side or by the sea.

The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices - Part 2/2For those who can afford it, the idea may arise for the uncertainty of what the future, no longer predictable, may bring. They will be looking for a comfortable property with a garden and swimming-pool, in case the same event repeats itself. But not only. For some professionals, our recent social isolation has proven that they could perform most of their tasks through calls and TCs. The necessity to go to an office in the city does not seem so essential and substituting video-calls to physical meetings is now considered as both practical and acceptable

Reality is that working remotely was already a trend on the rise, made possible by new technologies and adopted by the coming new generations (e.g. Millennials in their thirties), who have grown with these tools and means of communications. Professionally active for more than a decade now, they already represent the most important demographic category to invest in real estate.

And if you had the capability to choose, beside improving the quality of your life, wouldn’t you prefer to spend the next lockdown or work more regularly next to a bbq, on a terrace and within feet from a private swimming-pool (providing that the lockdown is in Summer!), rather than in a 50 sqm flat with a narrow balcony (if any) above a street in a city? This urban lifestyle remains the preferred of the younger professionals and students, however, for someone with the necessary financial resources, in his or her early forties, possibly starting a family, the suburban or rural or coastal spaces are attractive.

This is all well, but we cannot pretend that this hypothesis, no matter its likelihood, calls for few questions:

1- How many people can actually afford a house with garden and pool? 

They are not cheap, especially closer to the coast line. However, this may be a good time for such profile of buyers to consider new developments. Developers have been put under greater pressure (risks being proportional to invested budgets) to sell and their condos or flats, with communal or small private yards may be a more accessible solution for many.  In addition, their installations are new and, for some, built in consideration of those upcoming changes, allowed by technological progresses, in the way people live and work from their house. Developers are currently offering flats at considerable lower prices, although this is especially true when the buyer is an investor who can afford to buy all their remaining stock.

2- When people will have to go to appointments or to the office, even if less frequently, how long will it take them to commute to the city?

And how much will the costs and time commuting demands impact their decision?

3- People with children, or who are about to have some, must plan on where they will send them to school.

Will they be able to find the type and quality of school they expect in a remote village or a sleepy holiday town?

4- I personally witnessed people who spent the Covid lockdown in their second residence on the coasts instead of their claustrophobic flat in Barcelona. 

The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices - Part 2/2Even if the rules were identical in smaller towns as those in the regional capital, most of them could spend time outside in the private space of a garden or a large terrace. They exercised, profited from the sun (good against the “virus”), and could let the kids play outside… Compare it if you like to being in the prison courtyard rather inside a 4 m2 cell. It is not ideal but it makes a huge difference to have a sky (blue Spanish sky) over your head and the sun on your face.

So, yes, the demand for this type of properties may increase, but all is relative. What will be the real extent of this phenomenon? It is something that is easier said than done. It will depend on several questions, listed above, that must be answered, in addition to the most obvious one of affordability.

One may speculate that this may happen, but not in such a straight fashion. We could imagine more people investing in a second residences, where, when their priorities and occupations allow, they will be able to spend time, sharing more and more of it there as the world evolve and remote working becomes the norm.

Before concluding on this point, I must not forget to mention that there are of course other groups of the population, less fortunate, or who do not have the resources to consider such options. These are reserved for a fringe. They may still be changing location, not because of a lifestyle they have longed for, but because of the constraints of living at the heart of the city, because it is no longer financially sustainable.

For many, the Covid and its after-shocks may be the last straw to break the camel back.


Undoubtedly, there are always properties that are required to be sold quickly. Even more so, this will be true in the quarter following the de-confinement.

So, in individual cases, it may be possible to have the opportunity to argue a better price for your purchase. For example, when the business situation of the sellers has been affected by the lockdown. Some may need money to repay debts contracted to acquire the original walls or lands, to build the property. They may also be investors who have been left unable to sell their properties for longer than they had expected in their business model and they are eager to move on to their next operation, but not until their stock is sold.

Those sellers who, for their professional activity or personal revenue frozen for several months, depend more on a sale, will consider a lowered price to secure their finances. In such cases, yes, we may see some drops in prices or encounter more flexibility in the negotiations. But this is not something that reflects the general situation of the market. As buyers return and are able to profit already from a discount that varies with the product and geographic area, and may range in Barcelona from 5 to 20%, some sellers may decide that more reduction is not justified. Those  who are not in a hurry, will prefer to ride out the temporary period of readjustment and wait out for the market to catch up with its original pre-March progression.

There are also cases when an individual seller is forced, for personal reasons, to sell quickly his or her property, also considering that government has done very little to help the significant category of “autonomous”.

As a consequence, some people, mostly those professionals on their own (the category that is always the most exposed), have lost more than others. Selling their residence may be their only way out of bankruptcy to acquire enough funds to live until a solution to their unemployment presents itself.

The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices - Part 2/2We may indeed observe more cases but not on a scale that will truly tip the markets and create a true trend of severe reduction in prices. In conclusion, depending on the property, and the situation or need of its current owner, there may be more space to negotiate the price and this is where a buyer may take advantage of the next few weeks, when sellers look for cash flow.

There has already been a slight decrease in prices, more as an incentive to encourage buyers to return. This one will be short lived. But combined with a context favourable to negotiation, a buyer may achieve some exceptional deals. For example, if a buyer pays 10% less than in February, and the market goes back to its natural and predicted levels by the end of the year, early 2021 at the latest, he or she will not only save on the purchase, and the proportional taxes, but they will also recover this difference within 12-18 months, consolidating the value of the investment.

Finally, and I have mentioned this before, the agents have not worked for months too. Most of them depend on commissions only in Spain. They are therefore very motivated to recover their vital earnings and compensate, with more operations, their annual level of income. They could be your best ally to negotiate your next investment.


What was discussed in our fourth point may be more true for commercial properties, and this effect is supported by our first observations.

Owners of commercial spaces who were forced to suspend their business for several months are facing tough choices to address the financial problems they have incurred in and balance their budgets. Some may choose, or more radically be forced, to sell their premises. Others may decide to move to cheaper spaces in order to save their year and their business. There are also the few for whom this will not be enough and who may decide to close shop…

Unfortunately, as the government hasn’t helped at all, this is a sad reality, but one that will benefit those investors who have been waiting for opportunities to invest in commercial premises to either rent them out, install their own operations, or simply take over the package business activity and property for sale.

Office spaces may be affected too as companies might be also under the strain to reduce overheads this year. They may contemplate changing the layout of their offices, especially if, based on the recent experiment of remote working, they (the younger and less traditional ones) are considering to adopt for some of their activities or offer to some of their work force such method of working remotely. Regardless, they will have to review the costs in their balance sheet soon. Selling, moving, or tightening their commercial or office space should be one of few practical options, before more drastic unpopular ones.

Thus, if you are one interested or specialised in investing in commercial properties, this may be a good moment to find opportunities, without waiting for natural processes, such as retirement.


China, and by extension some other Asian markets (e.g. Korea or Singapore) are the only markets that have resolved the so-called pandemic and come out of confinement weeks before the less reactive European countries.

The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices - Part 2/2Although such Asian markets are by far more dynamic than the old continent, if only because their growth is positive and some of the highest in the world, many operations, purchases or developments are driven by Chinese, Hong-Kong, Singapore, etc… based investors. And that trend has been increased in  recent years, profiting from the turmoil in the EU.

But, in truth, in spite of the difference, these real estate markets are our only reference to measure the impact of the interruption and its recovery. Even if we apply attenuated expectations, we can  use it as a comparison to try to foresee how the situation will evolve in the coming months.

Thus, even if we take into account some variation between their real estate market and the Spanish one, some early data confirm that the weekly sales in the 36 largest cities in the Asian country have already been returning to pre-Covid-19 levels since late May (https://bit.ly/3d4CU5K).


It is too early to have a definitive stance on any price trend from the few data available since the real estate agencies have been permitted to work almost normally.

However, after examining the main real estate portals, we have not detected any dramatic change nor any general tendencies to indicate a severe and/or durable drop in prices.

I would like to open a parenthesis here:

On portals such as Idealista, when a property price is adjusted, the variation is shown in the ad. The visitor is able to read the previous price, next to the new price, and an added note stating: “this property has dropped by x thousands of Euros”.

This is all well and sounds like an interesting piece of information. However, it is important to apply some wisdom when you see some price reductions (especially when high). In the way it is presently designed, any seller or his/her agent can take off a property from the market, to later re-publish it with a hiked price. After few days, the price can be slashed in dramatic fashion, for example lowered by 50K or more, to raise all the flags on the search website, and claim a major big price drop. The illusion is perfect.

Some know and apply such a marketing tactic. But the buyers should be aware of it and rely on their knowledge of the market (or someone else’s assistance) to navigate around these tricks.

Anyway, in general, prices were rather stable before the Covid. The dramatic increase that we had observed between 2013 and 2018 had slowed down in Barcelona and its surroundings. They have progressed in a more reasonable fashion, although the saturation of the market, especially in the historical or coastal areas, have allowed the Catalan capital to remain one of the top major city where to invest.

As of today, prices remain rather stable with the occasional discounts but only as far as attracting back buyers and catch up with sales.

The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices - Part 2/2I believe that people cannot wait to go back to a normal life, and they will enthusiastically resume their previous activities, including looking for a property for private buyers, or catch up with their plans of investment for real estate-related businesses. They are eager to pick up where they left it and resume, with the pressure of a reduced timeline, what they were anticipating to realise before the lockdown.


I invite everyone to look at the market with their own eyes (and brain), and to rely on facts rather than hypothesis or claims that may be driven by marketing campaigning. Same goes for the virus.

I cannot recommend strongly enough that you take the time to dig a bit deeper, look for the truth… and let’s avoid something like that from happening again in the future.

2 thoughts on “The After Covid-19. Crisis or No Crisis? 7 Facts That May Affect Property Prices – Part 2/2

  • on 9 June 2020

    2 fantastic well reasoned articles that were a pleasure to read

  • Pauline Kang
    on 10 June 2020

    thank you for sharing, very informative and reasonable articles.

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