Moderate rental price decrease

In general, the market believes that many potential buyers are not able to access a home from a property point of view, and they are forced to turn into a rental market, which was already in demand before the coronavirus arrived. Experts therefore do not expect a substantial fall in rent. the pearl qatar

"It is clear that prices will have to drop because those who are not in the process of an ERTE have lost their jobs or risk losing them. But demand will continue to be very high since renting a property becomes a refuge for those who cannot buy, particularly in large cities. We have a clear lack of supply in the principal economic and demographic centres, and the demand is likely to rise, and therefore it goes without saying that rent falls will not be strong," says ASVAL Director General Beatriz Toribio (the Association of Homeowners for Rental Properties).

For his part, Bernardos believes that, "in 2020, there will be a lot more rental operations than in 2019. On the one hand, rental prices will be reduced significantly. And on the other hand, we could see a change from costly rentals to cheaper ones, with the concentration of the former renters living on a different property living in the same house..." Their numbers predict a rental price decrease of around 13%.

The same goes for the director of IE Business School's executive program for property management, who stresses: 'Renting started to pull out a lot before the break, for reasons such as difficult access to finance due to strict conditions or the lack of savings to pay a mortgage deposit, improved mobility of young people due to changes in concepts like collaborative work. These criteria are maintained and strengthened, which makes it possible for them to continue forcefully, mainly because of the extreme lack of supply (and especially affordable rent) and possible tightening of the conditions for funding."

As the experts explain, a predictable decline in mortgage signatures is one of the factors which will most impact on rental demand as banks tighten up the requirements when new home acquisition prices are granted in the context of an increasing risk of unemployment and a general decline in the purchasing power of citizens. Therefore, a decrease of around 30 percent in the formalization of new operations is expected throughout the year.

"Money is frightening and even more so lending it. During the 'Great Recession,' banks have suffered greatly and many entities continue to make their adjustments. These months of mortgage default must be resolved, but the financial sector is expected to be even more cautious, hence its rental market potential," stresses the expert at the IE Business School.

As a result of "notable lower demand, the mortgage grant is expected to decrease by 30-35 percent, since families tend, in the event of a crisis, to increase their savings on income and a stricter criterion on the grant of mortgages. Families working in SMEs, and whose revenues are less than EUR 2.500, find it much harder to obtain a mortgage," he says.

Rent, the spearhead of restoration

The experts send a message to the management to use the opportunity provided by any crisis and to make rent one of the main characteristics of economic, employment and investment recovery.

"Renting at affordable prices, both on the free and public markets, is a market not yet developed in Spain. This is why national and foreign investors are so keen to enter and choose this model. And we should use this opportunity to maintain the momentum it seemed to have before the health crisis arrived. In conclusion, it is a stronger and more flexible market than the purchasing market, and it would be important to lay the foundations for the sooner or later recovery and for future crises," stresses Toribio.

In her opinion, the commitment to the rental market "allows us to address a number of areas: the need to facilitate access to housing on the one hand and to generate economic activity, create employment and attract new investment, on the other hand. However, she considers it important for there to be a stable legal and regulatory framework that provides guarantees and reduces administrative barriers for investors as well as aid for those affected by the effect of the coronavirus and tax incentives for large and small homeowners to market their empty homes.