ERA Real Estate released a first-of-its-kind report today, “The COVID-19 Pandemic's Impact on Real Estate Around the World: An In-Depth Analysis.”
Although the impact of the COVID-19 pandemic on the real estate industry has been well-documented within the United States, it’d be prudent to know how the global event impacted other countries as well.
In the United States, demand out-paced supply given that we had record-low mortgage rates. This pulled many buyers into the market as did the shift towards remote work, causing people to migrate out of expensive urban areas into more affordable locations.
To understand how the pandemic impacted other countries, ERA surveyed and conducted interviews with international leaders from around the world, including ERA South Africa, ERA Japan and ERA Middle East. Similarities and differences were identified and analyzed.
The study found that many countries experienced similar real estate trends as the U.S., such as low inventory and increased prices. Flight towards the suburbs also made sense in many countries, though, not all. The second home market was invigorated by the pandemic in many places throughout the world, and the desire to own a home is stronger than ever.
"Few things transcend cultures and countries like the sentiment 'there's no place like home,’” said Sherry Chris, president and CEO of ERA Real Estate. “As COVID-19 spread worldwide, the entire global community became more intimately acquainted with their homes as we stayed home to slow the spread of the virus by reducing contact with others. This experience motivated many to rethink their housing situation, which in turn had an impact on housing markets around the world.”
Some counties, on the other hand, have reported different trends, such as mortgage interest rates hovering at or below 1%. Some countries have limited suburban and rural living options, making larger and more amenity filled apartments largely sought-after. Additionally, safety can have different meanings depending on the country’s political and economic climate.
“Overall, the housing industry in Europe is sustainable,” said Francois Gagnon, master franchisor of ERA Europe. “The COVID-19 pandemic has certainly heightened the housing shortage greatly because of the pause in construction, however the only thing that would lead to a slowdown would be a rise in interest rates. For agents, their success was dependent on their mindset about change. Agents who stayed connected to their brokers via Zoom had a very successful year.”
"In South Africa, we are seeing a lot of movement away from city centers to smaller towns and coastal areas as a result of being able to work from home," said Berna Daly, CEO of ERA South Africa. "We also saw a significant semi-migration of people to the southern region of the Western Cape province. A large influx of first-time buyers came onto the market as well, thanks to extremely low interest rates, which finally made buying smarter financially than renting."
