The Corona Virus is bursting in the city of Wuhan and could tragically affect the Chinese real estate market, but what is certain is that this situation will have significant repercussions on the Chinese real estate market and, in general, on the entire economic apparatus. We have decided, therefore, to analyse the phenomenon on various aspects . In order to understand its scope and the real threat to a truly strong economic system. In the next few lines, you will find the analyses carried out by the major experts in the sector, which are divided into several aspects.
The corona virus is not the first case that has affected China. In the past, the Asian tiger has been affected by the SARS virus. But in relation to that phenomenon, we can now see a significant change in our approach to the problem. According to the main scholars, the reaction of the Chinese markets and, in general, of the Asian markets, is different. The impact seems to be more direct both economically and psychologically. We are talking about as many as 11 million people .Totally stranded in the city, in order to prevent the spread of contagion.
But what does the local real estate look like before the virus? Asia presented itself as a real power on all fronts, including real estate. The speed in the construction sector, combined with the possibility of using cutting-edge technology, has attracted numerous investors. Obviously, the potential buyers, today, are divided into two macro factions. The luxury market and the more standard one. In the first case we are referring to a segment that wants at all costs to expand . So, even in these areas, and they take advantage of the peculiarities of the Chinese market to be able to combine them with the low prices that will be in the coming weeks.
The situation is different for potential customers who are economically “weaker”. In fact, these “ulimi” prefer to opt for locations even more expensive. But that give the impression of greater security. This decision, however, is the result of fear of investing in a market. That may be a perpetual victim of viral phenomena of this type. A risk analysis, in short, which is a little too personal and without any concrete reasons.
On the one hand, therefore, we are looking at the ease of purchase, on the other hand, at the potential danger of contagion.
The concrete implications for real estate in Asia are as follows. There will be a strong impact on the volume of transactions in the short term. Compared to the same period last year, there will be a 10 % decrease. If it increases in percentage terms, would lead to a cooling of the Chinese brick.
Luck in bad luck ! The epidemic coincided with the low season in the sector, so there are still few projects affecting China’s real estate.
What can I say, you just have to wait to read the latest news on the subject always on our blog !
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