This atypical year will soon end and, despite the impact that the COVID-19 pandemic has had on the real estate sector, it remained active, although with declines in the operations of most subsectors such as corporate and commercial. And things will continue to slow perhaps during the first quarter of 2021.
Let us remember that the real estate sector in Mexico had forecast a growth of 4% during 2020, after a decline in 2019 derived from the change of government, obviously this forecast was not fulfilled, but at the end of the first half of 2020, there was a rebound , reaching levels only 8% below last year, with August to November being the 4 months with the highest demand rate
And the outlook that looms for the following months will face the sector with the following challenges:
There will be less purchasing power
Due to the pandemic, there have been losses of more than 2 million formal jobs and more than 10 million in informal jobs , which have an impact on the purchasing power of Mexicans, which will lead developers to offer better products at better prices.
Use of technology for business processes
Real estate companies will have to keep updating if they want to stay on the market. It is important to master digital tools that also help the end user in making decisions.
According to Lamudi’s experts, one of the key movements in the sector was the increase in search intent through the internet that went from 90% to 99% due to confinement.
Construction of certainty
It is important to generate security and confidence in buyers who are willing to invest in properties, taking the necessary measures to avoid real estate fraud, which I have talked about in previous columns.
The evolution of the market during this very complicated year has made it possible to identify that we are faced with the following situations:
- A buyer’s market, where the person willing to invest has more bargaining power.
- Increase in the number of property rents and slowdown in the number of sales.
- Migratory effect to secondary colonies and even secondary cities . Many users have turned to other locations where they can find a cheaper property, for example in states such as: Querétaro, the State of Mexico, Jalisco and Yucatán
- Increase in co-living schemes due to economic necessity.
- Search for functional spaces that allow working from home.
Currently, average prices remain without drastic increases, but compared to the previous year in the last 6 months, houses, nationwide, registered an increase of 11% and apartments 8% in the type of operation for sale, this situation it could remain or reflect slight adjustments as times of uncertainty continue and developers remain cautious to start new projects.
It is a fact that the projected recovery for 2021 will be slower than what had been thought in the middle of this year. However, the sector is one of the most resilient, so you can reduce your operations, but you will never stop.