The coronavirus epidemic is a truly global phenomenon, irreversibly changing the way we live our lives. Both the effect of the virus itself but also the impact of national policies to control the spread of infection is already having huge impacts on the economy.
Spain is one of the hardest-hit countries in Europe, if not the world. With nearly 47,610 cases at the time of writing, the Spanish government has imposed a strict lockdown of all non-essential travel and activity, severely impacting the country’s economic output. However, one of the areas of most concern is how the virus will affect the country’s housing market.
The Virus In Spain
Part of the reason the economic impact is so severe in Spain is how badly it has suffered from the virus so far. Spain quickly became the country with the second-most cases in Europe and the fourth-largest outbreak in the world.
How they got to this point is not really relevant anymore, the question has become how to deal with it, and so far the Prime Minister’s answer is to deny any foreign entry and heavily restrict internal movement throughout the country. This is obviously having a significant impact on tourism. Across the country, tourism was down 1.4% at the beginning of March, and with the new lockdown measures the country is not accepting any foreign visitors for the foreseeable future.
There is, however, some good news for Spain. Due to the severity of these measures, Prime Minister Pedro Sánchez said that the virus had stopped the economy in its tracks. In fact, he announced a €200 billion package, the largest in the country’s history, to help companies protect their workers and keep paying their bills. In a stroke of good news, Spanish stocks rose 6% after the announcement of the package, so there is some confidence in the Prime Minister’s economic approach.
The Housing Market
March is normally a time for housing markets to pick up, but this year there are obviously some mitigating circumstances putting the Spanish housing market at risk. “There’s no point denying it, the housing market is in poor shape at the moment,” says Juan Carlos, a real estate writer at Britstudent and NextCoursework. “The property market depends heavily on tourism to sustain a regular flow of buyers, and with the lockdown, tourism has dropped to zero.”
At this point in time, anyone selling properties in Spain is best advised to take their houses off the market until the virus has run its course. The only potential buyers around at the moment are feeding off the lack of competition and hoping to tempt desperate sellers into massively undervaluing their properties. Better to take stock and reassess within a few months. If you’re looking to buy, there may be an opportunity when the virus subsides and the country opens up, but at this stage, it’s hard to tell when that will happen and what will be available.
This is the main issue at the moment: with the virus in full swing around the world, it’s very hard to predict even a few months into the future when it comes to the state of the Spanish economy or housing market. Rafael Mino, a business writer at 1Day2Write and Write My X, says “There may well be another economic package to get the country back on its feet after the lockdown is lifted, and even after Spain cures all its cases (whenever that may be) the ban on tourism could continue in order to avoid a new outbreak.”
Although this seems like a bleak situation for both human life and the world economy, there is a certain degree of confidence that Spain, along with the rest of the world, will get through this. It’s not sure how long it will take, but the economic initiatives by Pedro Sánchez and the perseverance of the Spanish stock market is promising, and there’s no reason to think that the coronavirus will destroy the Spanish housing market forever.
Our advice is to keep calm and carry on, to not make any drastic decisions until there is more certainty as to the state of the economy. This might not be ‘business as usual’, but no one will be rewarded for acting rashly at a time of crisis.
Michael Dehoyos is a content marketer and editor at PhD Kingdom and Academic Brits. He contributes to numerous sites and publications, including Assignment Writing Service. He has been visiting the Balearics since he was a child and has since got involved in real estate management in the area.