The appetites of people all around the world are shifting in response to what’s happening throughout the world, and the real estate industry is no different. Athena Advisers looks at the emerging new trends relating to Property, Investment and Lifestyle.
New patterns of demand
New property sales across all our markets have dropped since the start of April by around 50%, but cancellations of existing property transactions have not increased, showing that those who are in the process retain the long-term view and viability of their investments.
Interest in markets does remain, however, especially within markets where there is either extremely limited supply of certain properties or time-limited incentives that investors want to benefit from.
As per changes announced in February 2020, Portugal’s Golden Visa programme will no longer be available to those investing in Lisbon or Porto from January 2021 as they fall within ‘coastal areas’. This is underpinning demand in Lisbon, and Athena expects to see more viewings and transactions this summer than 2019 as investors wait for travel restrictions to be lifted.
Also, the fact that the Golden Visa programme has attracted over €5bn in investment since 2012, there is a good chance the Portuguese government will postpone its tightening of this programme to maintain investor interest in the market.
For buy-to-let investors, there will be a propensity to shift towards long-term rentals where possible.
Some micro-markets, such as French ski resorts, have also been fortunate as their unique dynamics of very low supply and strong demand remain and will, therefore, help keep transaction levels consistent, but only above the €1m price level. French developers are also sticking to their timelines of launches too as construction timelines have so far not been affected.
For example, a collection of 10 piste-side chalets in the popular resort of Saint-Martin-de-Belleville has already seen reservations as it is the first release of new-build chalets there since 2016 and will be the last piste-side opportunity in the resort.
Holding patterns – 700%+ increases in webinar viewers
With enquiries dropping by 60% since the start of April, on paper interest has reduced considerably, and investors have entered a holding pattern based due to the increased time at home. Comparing the viewership webinars from before and after April 2020, the number of viewers for French Alpine property webinars was up by 163%, while the number of viewers for Portugal property webinars rose by 777%.
In the past six weeks, across 12 webinars on different topics, Athena has seen 1,130 registrants, 624 viewers and the replays have been watched 280 times.
COVID-19 to bring about a new international ‘Pint of milk test’.
Sales are still continuing, mainly among high net worth individuals, but new purchase patterns are emerging. Athena has seen second homes become the primary home as individuals are opting to spend their time in isolation in their favourite cities, resorts or countryside.
As a result, the creation of a new distinctive list of requirements similar to the UK’s ‘pint of milk test’ is forming but on a new global level. The original “pint of milk test” was created by urban planners for new property development to see whether a resident can get to a shop to buy a pint of milk in 10 minutes or less without getting in their car. It was then adopted by agents across the country.
Wealthy second home buyers and property investors have always had a long list of requirements, but this is changing. They are thinking about where they want to escape to if another lockdown should come into place and the below are now major considerations:
- Somewhere that’s accessible, not isolated
- Not long haul, within 6 hours total journey time
- Within walking distance of basic amenities
- Established high-quality healthcare
- Outside space and facilities
Opportunities for buyers
A slowing market can also result in advantages for buyers. In these times, they can try to be more assertive in negotiations, whether it’s around prices or additional assets like parking or furniture and Athena are already seeing a bullish approach from buyers with significant discounts being requested.
Last week, a €13m chalet in Val d’Isère with indoor swimming pool and climbing wall sold after five years of being on the market showing that there is still movement at the upper end of the ski market.
Across destinations such as Lisbon or the French Alps, where there is limited demand in specific markets, prices will be sternly held by vendors and developers, though Athena is already seeing flexible clauses being added to contracts creating more suitable stage payments for off-plan transactions and also longer cooling-off periods between reservations and signatures.
Generally, developers and agents alike are taking a flexible and accommodating approach to sales to keep the market flowing as much as possible.
In-home lifestyles now under the microscope
During a lockdown, the home has become more important than ever, and perceptions of what is necessary in a home in these times have shifted entirely. It is now even more crucial for the home to accommodate a whole family’s needs – from parents to teenagers, toddlers to dogs.
Individuals and families realise what is important to them when they are inside their home for extended periods and what they want from a home for existing properties, or future investments is changing. Lifestyle, post quarantine, will be non-negotiable.
Large terraces and balconies which are able to fit tables/chairs and even areas for exercising like roof terraces will become very important. In cities like Lisbon or Paris, ground floor apartments can sometimes be overlooked due to security concerns from HNW buyers, but now these properties will command a premium.
Entrance halls will become a much more important space, large enough to leave all shoes, jackets etc. in a confined area where multiple people can be at one time.
Across the board having multiple bathrooms will become important in case people need to isolate and generally for hygiene reasons, to keep separate from guests, though this one isn’t specifically for wealthy buyers as most properties at this level come with more bathrooms than bedrooms anyway.
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