Hayon

Hayon

Roey Hayon: “Real estate prices will rise in the UK- after Coronavirus lockdown”


The real estate market is mostly going on a rebound once this Coronavirus lockdown is relaxed. The prices in the housing market will surge so much due to the edging up of activity levels.

Roey Hayon says, “Before the government restrictions on movements that affected all business sectors including the real estate market, the prices of houses had grown at a very high rate since February 2017. Although this figure is from a different period, it points into a direction of optimism that the market will get better after the lockdown is eased.”

Just in April, there was a 3.7 per cent increase on an annual basis in house prices. That means the average increase in a UK home moves up from £219,583 in March to £222,915 in April. This data is calculated based on the mortgages submitted earlier in the year but approved in April.

The 3.7 per cent increase on an annual basis is an indication of significant growth during the lockdown as well as an indication that prices of houses in the UK real estate market were actually on a rebound from the uncertainties caused by Brexit before the pandemic struck.

The economic response after the coronavirus shock

As a result of the robust labour market conditions, stable political backdrop after the general election, and low borrowing costs, activities and market prices are beginning to edge up. Although the short-term economic response is still quite uncertain, the economic intervention from the government is setting the tone for a foreseeable rebound immediately after the pandemic.

“The government intervention has totalled nothing less than £330 billion. These interventions are properly set to buoy the economy at this drastic time. More so, this intervention would also help to reduce the impact of the pandemic on the real estate market than what could have been with such a huge economic shock.” Says, Roey Hayon.

Since most of the transactions that were ongoing before the lockdown started were instead put on hold than cancelled, there is a higher tendency they would be continued once the lockdown and restrictions on movement ease off as soon as possible. And this would put a limit on the impending economic damage.

Roey Hayon concludes, “The annual house prices will only enter a negative territory this year if only if there is a huge drop in demand. But with the current functionalities of things, we don’t anticipate a downward turn in house prices in the UK real estate market at any point in the immediate future.”

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Roey Hayon: American Real Estate Will Draw More Investors during the Coronavirus Crisis

The impact of COVID-19 on the global economy is colossal and wide-felt. With China, the second-largest economy in the world, recording the largest outbreak of the virus and suffered the greatest. The COVID-19 pandemic has disrupted the manufacturing processes and led to significant breakdowns in the supply chain, which has resulted in economic volatility. Taking a cue from how the virus outbreak has affected the Chinese economy, the American real estate market should brace up for the impact.

Revenue and growth in commercial real estate will slow

Roey Hayon says, “The US commercial real estate (CRE) would experience the hardest hit if there is a full-blown outbreak of coronavirus in the US. Production and other economic activities will ultimately reduce because workers and employees would rather stay indoors to maintain their safety. The outbreak will also considerably reduce the spending rate of consumers and increase the default rates in commercial real estate loans.”

Companies and CRE investors are planning on how to help mitigate the spread of the virus, most notably in properties where multiple people reside or work. An enhanced cleaning and disinfecting process are safe and healthy to reduce the potential spread of COVID-19. However, all investors are expected to have other back-up plans; perhaps the virus isn’t effectively contained as projected.

“The global market has witnessed a lot of impacts since the coronavirus outbreak. For instance, in the past four weeks, the three major US stock market indexes lost over 25% of their value, the Fed dropped interest rates down to 0.25%, and the bond also declined drastically to a rate that has never been witnessed before. We also saw the Senate approved $1 Trillion emergency package for COVID-19.” Says Roey Hayon.

These indicators show that the impact of the coronavirus outbreak is hardly impacting the global market.

How bad would the impact of coronavirus in American real estate

Roey Hayon says, “The depth of the impact of COVID-19 depends on how widespread the virus gets. While the number of reported cases of coronavirus in the US is still relatively low compared to the US population of 327 million people, the virus is spreading quickly. And only time will tell how volatile the market will be. However, investors can take advantage of the lowered interest rates to invest in real estate as we brace up for the impact.”

Though the US real estate markets have mostly recovered from the 2008 recession, the coronavirus outbreak could usher in another full-blown recession in 2020 and beyond if the spread continues.

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