The impact of the COVID-19 pandemic has been felt worldwide. Countries across the globe shuttered economic activity while residents sheltered in place. The real estate industry was hit particularly hard with transactions slowing to a stop in some American cities.
But many countries with more stringent restrictions flattened their respective new case curves ahead of the United States, with outbreaks that were smaller in size. As those countries start to open up, international real estate agents are returning to work and shared advice for U.S. agents on what to expect.
In Australia, some agents are starting to leave the industry
Like the United States, Australia had a hot market interrupted by COVID-19, especially in the major markets of Sydney and Melbourne, which had been seeing around 10 percent price growth in the past six months, according to Craig Hill, an eXp Realty agent in Australia.
“The market remained strong in January and February and even through early March. However, as Australia moved quickly to lock down conditions, the entire economy along with real estate sector ground to an almost complete halt,” Hill said. “Realtors were unable to show buyers homes in person or conduct live auctions which is a strong sales method we use here.”
Australia had also just come out of a market downturn in 2018 and 2019, so many brokers were struggling to get their business back even before COVID-19, according to Hill. The result is that some agents are already starting to leave the industry directly as a result of the pandemic. The downturn is part of the reason Hill decided to join eXp Realty, which operates on a virtual brokerage model.
The first-time homebuyer and entry-level market has been the first to recover, but the higher end has been a bit slower since things re-opened in Australia.
“The issue we have is low stock with vendors reluctant to list with the general uncertainty in the economy,” Hill said. “The media has contributed to this sentiment with a barrage of predictions of doom in the property market.”
In the Bahamas, luxury buyers are ready to pounce
The Bahamas, like many other countries, saw a strict shelter-in-place order that greatly impacted real estate and put transactions on hold. But unlike many other countries, that shelter-in-place order may have actually been good for the long-term outlook for the country’s real estate market, according to Peter Dupuch, the real estate broker of ERA Dupuch Real Estate.
“Many of our high net worth ex-pat clients chose to self-quarantine in The Bahamas, coming from the UK, Amsterdam, the USA and even further afield to spend time in the glorious sun, on their private islands, with wonderful beaches and amazing ocean views,” Dupuch said. “We believe there will be an uptick in foreign investment as buyers realize they can now work remotely from anywhere, and given our weather, lifestyle and ease of access, the Bahamas is the perfect place.”
In the time since the lockdown restrictions were lifted, Dupuch’s predictions of an uptick in foreign investment are already coming to fruition.
“One of our new post lockdown listings, a prime waterfront homestead, went under offer in days and generated huge interest, showing buyers are there and ready,” Dupuch said. “We have showings set up to foreigners for the day after our borders open up, and the local market it getting back in the swing of things both on the listing and buying sides.”
In Egypt, a changing real estate map
The Middle East and particularly Egypt were hit hard economically by the lockdown, according to Gehan Awaad, the regional head of operations for ERA Real Estate in the Middle East. The lockdown months of March, April and May, are usually the highest sales months, and the largest real estate event in Egypt for developers was canceled this year.
“We know that few areas of the sector may be impacted more than the others but, in general, any disruption to the real estate market is likely to be a fundamental downturn, given all the precautionary measures, and pre-emptive actions that have been carried out and the structural approach the Egyptian government is taking in facing the current international problem,” Awaad said.
“The pandemic will change Egypt’s real estate map, as some real estate fields will be more in demand than others, as an unprecedented boom in medical services and hospitals in the near future — especially with the revealing of the lack of medical services provisions within residential communities, which is also one of obstacles that prevent property export.”
Sellers have been reluctant to list their properties as the country opens back up, and it’s creating a financial hardship for agents and brokers, according to Awaad. He believes both the government and real estate developers are committed to their staff and agents and doing the best to keep them safe.
In France, real estate activity has been ‘intense’
For the first few weeks of lockdown, France saw absolutely no real estate activity. Speaking with Inman in Mid-April, Laurent Demeure, the CEO of Coldwell Banker France and Monaco, said that was starting to change as the country eyed a mid-May return to real state activity.
Now, according to Peter Laurier, the director of ERA Agence Royale, the real estate market is getting “intense.”
“Great news for our activity, so yes, at the moment it’s back to normal and maybe even better: People are so determined we don’t waste our time,” Laurier told Inman.
Laurier explained that being in lockdown made people realize that they would like to enjoy life more and take on their own personal projects. That has mostly included buying a house, or changing where they live, or going on a vacation, according to Laurier.
In Indonesia, plummeting prices have buyers looking for deals in secondary markets
The total number of transactions in Indonesia dropped greatly in April and May, according to Angeline Vandani, a manager with ERA Indonesia. Indonesia was a bit of a different case, because the country never really went into a full lockdown — it just applied wide-scale social restrictions.
Offices, hotels, retailers and shopping centers are opened as of June 15, but require masks and face shields, hand sanitizer on every corner and physical distancing. Businesses are running at 50 percent capacity and shorter hours.
The secondary-market is seeing a huge price correction, of up to 30 percent in some places, Vandani said. If the owner is that in need of money, in some places they are accepting offers 30 percent lower than list.
“In primary markets, people still have interest but only for well-known developers,” Vandani said. “Costumers are very selective in primary markets and will ask for a special package of payment to the developer.”
In Japan, real estate operations may finally go digital
Real estate agents in Japan saw a decline in activity due to a decrease in the number of customers, a decrease in the number of inquiries and the postponement or cancellation of business negotiations, according to Hiroshi Shimizu, a real estate agent with ERA Japan in Toyko.
“Sales requests increased and purchase requests decreased,” Shimizu said. “The number of inquiries about residential properties decreased, but the number of inquiries from offices increased.”
“Investment customers continue to collect information, but they do not take much action and wait and see,” Shimizu added. “For cash-laden investors, now is the time for opportunity and willingness to buy real estate.”
COVID-19 is also pushing the real estate industry to further digitize some processes, in a country that’s shown reluctance to digitize things like disclosure forms.
“If the whole real estate operations go online, not only will the burden on the real estate agent be reduced, but the buyer will also be able to avoid the risk of infection,” Shimizu said. “As a result, we will be able to use our time effectively.”
In the Netherlands, happy sellers and agents and a faster sales process
The COVID-19 pandemic may have made the life of both real estate agents and sellers much easier in the Netherlands, as video tours have weeded out the “tourist viewers,” according to Paul van den Putten, the CEO of ERA Netherlands.
“Where there used to be 60 showings and 5 offers on an average home, there are now 20 viewers and 6 offers,” van den Putten said. “So the ‘tourist viewers’ have lost interest and have taken a massive interest in watching videos and virtual tours and 3D presentations and only serious buyers come over for an actual showing of the property.”
“So productivity has increased for agents, and sellers are happier because less viewers and more offers speeds up the process,” he said.
The pandemic has overall had an unexpected positive impact on the market, especially in urban areas where supply was low and demand was huge. Van den Putten said he’s also noticed that people in urban areas are looking for bigger homes in the suburbs and looking to move outside the city.
In South Africa, new developments are delayed and demand for rentals skyrocketed
Lockdowns in South Africa caused delays for the launch of new housing developments and put an overall brake on the housing market, with new listings and properties viewings stalling, according to Dudu Mokolobate, a real estate agent with ERA Real Estate, Pretoria East.
The government offices involved in the transaction have also delayed closings, making it harder for agents and stakeholders in the industry to get paid.
“There is a gradual recovery which is mostly the buyer’s market and there is a notable increase in the demand for rentals due to uncertainty brought by the pandemic,” Mokolobate said. “We have also noted an increase of distressed sellers from the bank’s database due to job loss, salary cuts and retrenchments because some industries which are regarded as high risk still cannot operate and generate income.”
South Africa, like many other countries, has leaned into using virtual technology. Social media use has particularly skyrocketed for real estate agents and individuals looking for properties.
In Thailand, developers are creating more tenant-friendly experiences
In Thailand, most office, industrial and residential markets are down in terms of transactions and conditions are tipping towards being more tenant than landlord-friendly, according to Nopparat Roongruangphol, an agent with ERA Holding in Thailand.
“Some new projects are being developed with the creation of positive tenant experiences in mind, such as smart parking, centralized security systems, free amenities, PM2.5 air filters, private bathrooms and a dedicated floor for health and well-being services, etc, to attract more tenants to the properties,” Roongruangphol explained.
The falling leasing activity the country has seen has been improving, as several markets are reporting a stabilization of leasing activity. The city overall has benefitted from the e-commerce boom with the entire world in lockdown.
In the United Kingdom, a rush of new properties to the market but potentially looming layoffs
The property market in England has been “very lively” since the lockdown restrictions were eased with property owners, according to Mark Bentley, a real estate agent with eXp Realty in the U.K. Unable to benefit from the usual strong spring market, people are rushing to place their homes on the market now in an attempt to secure a sale before the summer.
“Property sales levels have also been very good with buyers keen to snap up the properties that are available,” Bentley said. “Some of the more rural locations, eg: Norfolk, Devon and the South Coast in general, have seen a rise in inquiries as people realize that they can work from home or their employers have advised them that they can continue to work from home and therefore they can move away for the big cities into a greener environment.”
Bentley added, “London agents are reporting that some vendors/owners are now choosing to sell and move out of London.”
There could be some impending trouble, and it’s a lesson the U.S. may want to follow closely: The U.K. had guaranteed 80 percent of the salary for furloughed workers and covered offices costs. In the summer, the government will cover partially furloughed workers as well, as restrictions are eased and staff are brought back for restricted hours.
“By the autumn, October/November, the government will end the furlough schemes, and we will then know how many staff will have retained their job and how many have had to be let go,” Bentley said. “Hopefully July, August and September will be busy and business will return to somewhere near normal