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Coronavirus hit the real estate industry hard

Coronavirus hit the real estate industry hard Feature Image

About 85 percent of real estate companies have closed or their activity has been reduced since the beginning of the isolation period due to the pandemic, but more than half are actively trying to prepare for the recovery.

A study released by the Association of Real Estate Agents of Portugal (ASMIP) with its members, found that 56.5 percent of the mediation companies have lost “all contracted deals in the last two to three weeks”, about 33 percent are currently “inactive”, while 52 percent “are working only half the time, completing processes that come in, but without access to new customers and products”.
In this context, the association said in a statement, the surveyed companies said they were “in a financially bad situation, but for now stable”, if the stoppage of the activity is not too long.
“Some say they are taking the time to restructure companies to the new reality, reorganising real estate files and clients and contacting them in order to keep the relationship alive and even to meet virtually whenever necessary,” notes ASMIP in relation to the work now being under taken by those in the sector.
The 25 percent of companies that are still making visits to properties, guarantee that this “only happens in very exceptional cases, is limited to one person, and is only to complete a process that was already underway”.
As they explain, “with new customers this does not happen, due to the state of emergency restriction, but also because there are no customers available to do so”.

Among the respondents, 68 percent say they have seen business cancelled, and of these, about half point to the cancellation of up to 10 percent of the deals they had concluded and the other half to the loss of 20 percent to 30 percent of those deals.
Figures that, according to ASMIP, show “the high damage in the often weak financial structures of real estate companies, sustained in a continuity business that, suddenly, suffered an abrupt cut”.
With regard to the execution of deeds, the survey points to the cancellation of 46 percent of the total, and, for half of the companies.
Among the surveyed real estate companies, 56.5 percent said they had lost business that had already been contracted, that is, in addition to the stoppage of activity since the beginning of the quarantine, more than half of the companies stopped concluding businesses in which they had been working for days, weeks or even months.
Asked whether the use of multimedia platforms would be enough to keep customers interested in looking for a home, almost two thirds (65 percent) of respondents rejected this possibility, with 98.4 percent reporting a lower customer demand for the acquisition only by this route and 75.8 percent referring to the same in the case of leasing.
In this context, 60 percent of companies guarantee that they are already taking measures to achieve a return in activity, although the overwhelming majority point to the existing uncertainty.
“Companies that survive will go through painful cost control processes, learning to live with much less than they have hitherto, since the market will be significantly reduced, at least in the short term”, considers Francisco Bacelar, the president of the association.