As a result of the Covid-19 crisis, no special changes have been observed in housing prices, and there is no reason to expect that property prices will fall in the future, says Aigars Šmits, Chairman of the Board of the real estate company Arco Real Estate.
He noted that in recent months, as a result of the Covid-19 crisis, the number of transactions in the real estate market has significantly decreased, the number of transactions has decreased by about 30-40% compared to May last year.
“At the moment, however, we believe that too little time has passed since the Covid-19 crisis began to assess the impact and consequences it had on the real estate market. Property prices before the start of Covid-19 were under no ceiling to suggest that “Prices are suddenly falling sharply. There is not really much room for those prices to fall. Supply has fallen, because people are waiting and going to say a” respite from the general economic environment, “said Smith.
He added that this Covid-19 crisis is not quite comparable to the economic crisis of 2007-2009, because the movement in the market, even if it happens, is only in the range of 1-2%.
“Activity in the market as a whole has fallen, if prices have not fallen significantly, then the number of transactions though. The number of transactions has decreased by about 30-40% compared to May last year. But this is absolutely normal – if people do not leave the house, they isolate themselves, then thinking about buying a property is the last thing you want to do at a time when existential things are important, “Schmidt explained.
Asked whether the Covid-19 crisis could have the same long-term effects as the previous crisis, which led to a significant fall in property prices 10 years ago, Schmidt replied that this is what cannot be predicted at the moment.
“What does it mean in the long run? Will there be a second wave of Covid-19 or not? If it is said now that there will be no second wave, then I would say that this crisis will have no effect. If we talk about falling prices in the previous crisis, the price index in 2007 “The secondary market was 1,620 euros per square meter, now it is 820 euros per square meter. Therefore, there is no reason to talk about the fall in prices at the moment,” said Schmidt.
He added that at the moment we can not talk about long-term effects, because whether it will be two or three years, it is unpredictable – no one knows how this virus will be limited, combated.
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