In the first place, the leasing activity has been in the eye of the hurricane, precisely because it is a successive tract obligation, as it happens with the recurrent payment -monthly- of the administration fees in buildings, shopping centers or other co-ownerships, to guarantee the adequate operative functioning of the horizontal property, which determines a constant commitment in time for several months, or until the expiration of a contractual relationship.
The obligation contracted through lease contracts with durations that can be for short periods or even for more than one year when it is especially a question of commercial premises contracts, are expenditures that cannot be postponed under normal conditions, which now seem to be interrupted in an irresistible way for many.
The impact in general terms has permeated different sectors of the economy and the real estate sector is one of the hardest hit actors. It can be said that 90% of the economy is going through a bad time.
The real estate activity that includes the administration, the commerce and the transaction of real estate in planes, in pre-construction, new or used, will have important affectations in the short, medium and long term. Check out New Launch Condo In Singapore 2020 to learn more.
In the short term, we can point out that the uncertainty regarding the duration or prolongation of the pandemic, as a consequence of the implacable Coronavirus that has touched the earth in multiple latitudes, is one of the factors that at this moment faces the interests of owners and tenants and on the other hand, affects the development of more than 1,900 construction projects that according to Camacol, unfortunately have had to be stopped throughout the national territory.
The government has spoken out in a timely manner and has undertaken a rapid learning curve around the invisible enemy, however, the measures taken on the economic edge will always be insufficient. Resources are finite and more so when it is in conditions of paralysis.
Only the money that circulates by concept of leases around the country, ascends to 3 billion pesos per month and near 65% of the properties placed in lease, derive the only sustenance from other families -owners- that do not have another source of income different from this one.
This is already a shock that real estate agencies, brokers and landlords -including owners- have had to deal with, seeking to evaluate the condition of each tenant and owner and from there generate the best scenarios to alleviate the fever not as a result of Covid 19, but of the economic condition of each of the parties, with different needs and desires in times of crisis.
On the agility with which we attend these agreements between the parties involved, will depend largely on the balance of the exercise lessor, not to undermine the order and rigorous and why not, flexible exercise of the real estate business.
Colombia, unlike the region, is a country of tenants, 34 out of every 100 homes are occupied by tenants, Risaralda is the number one region of the country with 44% still exceeding Bogota, while in Latin America and the United States we can speak of a percentage close to 20 or 22%.
The figures just quoted may generate a greater sensitivity in Colombia, where it is evident that there are fewer owners. This is a result that in the immediate future should be analyzed within the public policies of access to housing in Colombian territory.
What will happen in the medium term? Let’s talk about 4, 5 or 6 months, actually for science it is even uncertain, any prediction would be almost irresponsible for the most expeditious analysts. Let us dare to assume a scenario. In the face of the deterioration of the economy in spite of the modest relief from the banks adjusting their interest rates, decisions in some proportion pressured by the citizens and also by the government, will motivate the demand for financial credits by people and SMEs while we forget the crisis, but in the medium term, the banks concerned about their portfolios, are going to begin to harden their credit policies and will be adjusting their rates, but upwards, marginalizing many of these financing possibilities.
It is clear that the economy is moving in the midst of a “tug-of-war,” since the financial institutions also have limits, and if there is no consumption – added demand – the economy will slow down and companies and individuals will begin to default on their obligations.
In the above circumstances, given the wear and tear on the economy and all its productive apparatus, the inevitable unemployment at rates possibly of 20%, they are going to end up accelerating the termination of multiple leases for commercial use and behind these, those of urban housing in the midst of a drama.
The phenomenon just mentioned will increase the supply of real estate on the market and therefore, its price will be exposed to decline and somehow will also lead to the recalculation of some contracts to prevent the vacancy of real estate.
If the economy does not manage to recover in the second half of 2020, in the long term the effects of the Asian virus will remove our finances throughout 2021 and the year that passes will go down in history as one of the most difficult episodes of the modern economy.
I see with concern too much news related to epidemiological statistics and other forecasts, preparation and enlistment of health logistics, but very little diffusion about the advances or advances for the identification of a vaccine that will eliminate, or place humanity in conditions of lesser defenselessness, like those we have suffered until now. Let us hope that this is simply a mistaken perception, belied by silent work. Please take a moment to visit Park Colonial Condo for more information.