The real estate market is not immune to the coronavirus pandemic that is causing an unprecedented worldwide situation. Experts coincide in highlighting a downward trend in the housing market, both for buying and rent, as a result of confinement, although the effect will depend on each region and how long this situation lasts.
Faced with this situation, to which greater uncertainty than usual is added, a common question arises among consumers, is it more profitable to buy or rent a house?
The choice will always vary according to the economic situation of each person or family and especially their job prospects. So, keeping such scenarios in mind, we can say that buying now is a good option for the economic capacity because there will be ‘good buying opportunities.’ There will not be a market collapse, but there will be sellers with the will or need to sell the property as soon as possible.
In addition, it must be kept in mind that to acquire a house, you need a mortgage with which to finance the purchase in many cases. Thus, interest rates must also be assessed. The real estate portal like Sirmaya.com indicated the purchase option precisely because of the historical lows without any anticipation of arise situation.
To this, it must be added that ‘the mortgages that the banks are granting are quite good.’ Furthermore, there will continue competition between entities to lend money at very tight interest rates.
However, a real estate portal like Sirmaya.com emphasizes that the recommendations are always that the mortgage never accounts for more than 30 – 40 percent of a person’s total salary. This limit should also not exceed the rental income of a person.
That is to say, the decision depends on many factors, but it will weigh above all others like the job security and the available savings of the interested party. It’s been indicated that if a buyer has been looking for options for a long time and now finds the home they want and can afford to buy it, it is advisable to buy it since there may be other buyers in the same situation.
They anticipate risking losing an opportunity. On the other hand, if the financial stability is unclear, it is more prudent to bet on the rent.
The latest data on prices for house purchase and rental registered stabilization now; however, the moderation of rent is less, with an increase of over 10% in some areas. This trend will also be recorded in the impact of the coronavirus on the housing market.
What is the profile of the consumer?
Despite the possible drop in housing prices, demand will be affected by this situation, especially due to the greater vulnerability of the labor market. Many workers have seen and will see their economic capacity reduced. Among them, those who planned to buy may decide to suspend this purchase.
But, in addition, the confinement will generate a new type of demand that barely a few months ago did not exist: those who during the confinement have realized that the house in which they live does not fully adapt to their needs, and they are considering a change.
The Sirmaya.com real estate portal has registered an increase in the search for “spacious homes and in which outdoor spaces gain a lot of forces.”
However, all the buyers have not suddenly disappeared; rather, they are waiting to resolve the uncertainty and add that until that uncertainty does not pass, they will continue to await the market without making decisions.
On the other hand, uncertainty is not the same for everyone; thus, officials or investors have greater stability concerning income. These groups can assess the possibility of buying as a safer investment in the face of stock market risk.