How COVID-19 Has Impacted The Realty Industry
The depth of the economic impact that is brought about by COVID-19 is yet to be determined as the distribution of a working vaccine still remains to be implemented. However, some of its effects are already felt throughout many industries, including the real estate or realty sector.
In just a matter of weeks, people’s lives have changed in many ways. People stopped going to work, shopped less in physical stores, and even stopped or foreclosed real estate properties. Lesser foot traffic means lesser revenues for most businesses, prompting many to close down just a month or two after lockdowns were implemented.
Since most communities are already opening up, some businesses have found new ways to thrive. Even then, investors and realtors are bracing for more impact, and there’s still a lot of uncertainties about the future. Let’s see how COVID-19 has affected the different sectors of the realty industry so far.
On Rental Property
The number one reason why most businesses struggled to stay afloat when the lockdown started is that they cannot keep up with rent. Without income, many establishments found it hard to pay rental fees and utility bills, leading them to close down. Consequently, this directly affected the commercial rental real estate sector.
In the news, local and national governments came up with new policies and encouraged realty owners to either lower rental rates or accommodate payment extensions. While this move helps the community recover and ease the burden on business owners, it’s not a holistic solution as it also puts real estate owners or landlords at a disadvantage. Landlords are also forced to make do with lesser income or operate with a loss as the pandemic affects their tenants’ businesses or jobs.
Construction And Realty Industry
Naturally, a decline in real estate activity would also result in low demand for construction services. According to Global Market Insights, Inc., the global construction equipment industry is also severely affected by the pandemic. One factor is the decline in residential real estate demand, which drastically affects the construction of residential buildings.
The report also highlights the changes in the industry that can help it adapt to the new normal. This includes the integration of digital technologies, including the Internet of Things (IoT), and telematics into construction equipment to maintain usage records and reduce downtime.
Despite a rather bleak circumstance, affected contractors and developers can get help from reputable organizations that are stepping up to help the industry. Just learn more about Kuba Jewgieniew to find out.
Properties In The Tourism Industry
Travel bans and lockdowns have affected the tourism industry the most. It’s almost impossible to just travel anywhere. Cruises and vacation trips are canceled, and airlines were one of the first to go bankrupt at the start of the pandemic.
However, there are aspects that give hope to investors, especially in the realm of local tourism. As some communities are starting to open up, drive-to vacation property rentals are also showing a lot of promise. People are now more inclined to take trips in suburban or rural areas that are just near their vicinity since long-distance and international travels are still restricted.
Conclusion
Since COVID-19 vaccines have been showing a lot of promise and are already distributed in some countries, the real estate industry is seeing a more positive future. With viable vaccines, people who work from home will eventually return to work in offices, bringing rental properties to recover from losses.
While the world cannot instantly go back to pre-COVID lifestyles, the new normal will still bring new opportunities to the real estate sector. Open houses can be done virtually so agents can still conduct their work from a safe distance. Construction firms can start utilizing technology to monitor projects and buildings.
Since vaccines are already being distributed, many areas will open up more. Slowly but surely, people can safely travel again and gradually help recover the tourism, construction, and real estate sectors.
