The coronavirus pandemic is affecting millions of companies worldwide extremely negatively and as Spain now approaches week 7 of lockdown, many companies likely won’t survive. In popular holiday resorts like Javea, the real estate sector is an important market. Real estate agency Valuvillas, explains how the state of emergency is affecting the property market and agencies not only in Javea, but in Spain.
The longer the crisis and lockdown last, the more the property market will stagnate and eventually experience disruption, and prices will drop. By how much is anyone’s guess, but this will come as a significant blow to homeowners in Spain who have only recently experienced the market values of their homes recovering from the economic crash of 2008.
If you currently have a home for sale, you can expect to be in it for the long haul. Nothing can sell right now because agencies are closed, banks are only able to deal with emergencies, and would-be clients are banned from setting foot on the street apart from making short trips fro essentials.
If you have been thinking of purchasing a property, your search (unless you are still at the online stage) will need to be put on hold for now, as lockdown does not allow for house viewing. Furthermore, as a buyer, you would be wise to see how the market develops before making a firm decision.
In beach resorts such as Javea, many owners purchase a holiday home and let it out at various times of the year to help pay for maintenance costs, rates, community fees, etc. Due to lockdowns both in Spain and abroad, these owners should expect a lengthy period of their homes remaining empty and, therefore, no rental income. Such owners could also further suffer if other sources of income decrease or dry up due to the virus.
The government has declared mortgage-relief procedures for people in need, but this only applies to homeowners with a mortgage on a primary residence and who are classified as ‘economically vulnerable.’ This could apply to you if you lose your job due to the COVID-19 virus, or if your earnings drop 40% or more if you are self-employed or own your own business. You could also be viable if your total household income is less than 1,613€ a month.
Many foreigners who live permanently in Spain won’t fall into these categories and will not receive any help with bills or mortgage repayments.
Owners who have a property in Spain but live in the UK, France, or Germany, etc., can expect some time to pass before they can revisit their homes in Spain.
If this applies to you, you should take steps to make sure there is enough money to pay the mortgage (where applicable) plus potential maintenance fees. Depending on where your property is, it is likely also a good idea to ask a friend or neighbour to keep an eye on the property and if possible, go inside from time to time, as empty properties become a magnet for squatters, particularly during difficult financial times.
It’s tricky to foretell how the Spanish property market will react to these unusual times. Regarding the actual market, it’s anyone’s guess what will happen, with experts voicing very diverse opinions.
Looking at the situation positively, there are vast numbers of individuals now at home in self-isolation, with very little to do but daydream. Although some people are working from home, others are experiencing downtime and may use the time for reevaluation. Plans for the future may change and perhaps a new life in the sunshine will become a priority.
Let us trust that although property sales are currently on hold right now, that many people are using their downtime to house hunt online. Hopefully, it won’t be too long until the Javea property market is back to where it was before the current state of emergency.