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Post-coronavirus crisis buying and selling land abroad!

The consequences of the coronavirus epidemic have been felt by domestic and foreign property markets as the WHO declared the virus a global pandemic in March 2020.

Various property agencies have registered dramatic declines in inquiries from overseas purchasers in China, Australia, Europe and Great Britain or no business activity due to lock-down restrictions. 1 bedroom apartments

Other markets like Canada and the US are still reeling from the halt of operations, underlining the effects on the global housing sector of the coronavirus pandemic.

Worldometer claims that since the epidemic started, COVID-19 has infected more than 128 million people and claimed more than 2,8 million lives worldwide.

The UK government initially advised citizens not to sell or purchase property abroad or domestically due to increasing market uncertainty. Although both domestic and foreign property market activity has taken hold, the global economic outlook improves, many problems remain when it comes to buying and selling properties abroad.

The Zoopla property portal had predicted that in spring, the UK housing market would decline by 80% year on year and by an average of 60% in the quarter in 2020.

The second half of 2020 was less serious for the UK real estate sector, helped in large part by the stamping vacation of Chancellor Rishi Sunak, announced in July. Savills announced that transactions were 24% higher in October 2020, which is expected to remain steady until the end of the stamp holiday scheduled to end in June 2021.

The current inability of the UK to fly however impacts economies in other nations, such as Spain and Australia. According to the Spanish Land Registrars Association, in 2019, the British accounted for 14% of international market share – the country's largest foreign homebuyer.

The shortage of foreign investment due to the coronavirus has triggered a major decline in Spain's second housing market. Estate agents anticipate that demand would stagnate or decline further after the coronavirus has passed, as Spain is one of the most affected countries.

Higher unemployment rates are also having an impact on housing markets, given the lack of economic activity and company closures.

In Australia, major banks declared redemption of mortgages and lower house prices to compensate for the economic downturn and alleviate financial burdens on those who lost their income.

However, if land values decrease, this would produce negative equities, which will allow homeowners who choose to sell property to lose.

Consequently, it seems who homeowners that sell properties abroad after the coronavirus will more likely be hit by lower house rates than buyers.

If after a coronavirus, you are interested in selling or purchasing property abroad but are increasingly unsure, we have put together a guide that will help you to buy or sell your property abroad. Only talk to one of our property experts about the best way to deal with property shopping abroad.

Monitor prices of housing

Historically low inventories and lower mortgage rates have a slight impact on the property market and improve housing competition, but the coronavirus seriously disrupted life and markets.

The scenery every day of what purchases and sales which look like after pandemic change due to the evolution of the virus, so we suggest closely monitoring both housing and foreign exchange prices.

When your home currency strengthens in foreign currency, and changing exchange rates directly impact your property purchases, the best time to purchase property abroad.

For example, when your basic currency is pound sterling (GBP), and you want to buy a property for 300,000 Euro in Europe, how much this property costs you today will vary compared to 3 months ago.

By the end of 2019, GBP/EUR (EUR) was EUR 1,1697, meaning that a property worth EUR 300,000 would cost GBP 256,476. Three months later, the currency exchange rate was EUR 1,148, which means that properties with the same price would cost about GBP 261,324.

While earlier studies indicate that pandemics have little effect on housing prices, the severity of coronavirus damage could lead to a strong post-pandemic fluctuation in property prices.

Global production has decreased and unemployment has increased to record levels that can affect demand for land.

This can be a stimulant factor for those who are interested in buying property abroad as decreased demand means less competition and lower house prices.

But if house prices stabilize after the passes of Covid-19, anyone seeking to sell property overseas will benefit from lucrative returns.

Spanish property picture

Home Virtual Views

If you are an expat buyer or are interested in investing in a foreign property, virtual house views are a great way to view an estate.

Travel constraints and government lock-downs made it incredibly difficult to visit the actual home, which can dampen the purchasing feeling. However, property websites like Rightmove, Zoopla and OnTheMarket have sections abroad which permit you to sell or buy property abroad.

Other existing property agents, including Knight Frank, Savills and Hamptons International, also offer online international property in Great Britain.

It is also essential to track currency exchange rates, as this affects the cost of purchasing your property overseas. Exchange rate fluctuations would also impact the repayment of the mortgage if you pay from a UK bank account.

Because of the coronavirus pandemic, the exchange rates were volatile, but markets have softened as the infection rate and death rate have shown signs of slowdown in recent days.

Based on current market sentiment, it seems that after the coronavirus pandemic, the British pound (GBP) will elevate against major currencies, but this is not absolute.

Exchange rates can be tracked by currency maps, but it can be difficult to secure a competitive rate as markets change rapidly.

We encourage you to talk to a Halo Financial Currency Expert in case you are doubtful, as we are foreign exchange experts and watch world developments closely. Alternatively, your currency rates can be verified below.

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