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The effects of the coronavirus on real estate

30/03/2021
The effects of the coronavirus on real estate

The outbreak of the coronavirus had a major impact on our society. Many people lost their jobs, the turnover of companies decreased, and vacations were canceled. The costs saved were used by a large number of private investors to invest in shares. This was partly caused by falling stock prices towards the end of the first quarter of 2020.

Still, the stock markets are volatile. But what about investments in real estate? Is there a visible trend? Experts are taking a cautiously positive look at the future, with the general consensus being that investing in real estate remains a good decision no matter what – in times of corona and beyond. Investors are looking for stable returns and are finding them in the real estate sector. For years a secure investment that is resistant to inflation, unlike the savings account. According to experts, we lose 183 euros annually for every 10,000 euros we save due to low interest rates and inflation. At the same time, the value of real estate in Belgium has increased by more than 4%.

If we look at the type of real estate we notice that residential real estate is the least affected by the crisis. Commercial and healthcare real estate has been hit hardest, and office real estate may also begin to experience more hindrance once companies get into trouble. The call for affordable student housing and social housing is also still very strong.

Real estate rentals become more expensive

The supply of rental properties fell last year and demand remained strong, yet this did not driveup prices as quickly as it did for owner-occupied properties. So renting did not rise in price half as fast as buying. And that’s while the supply of rental properties has shrunk. Because of the lockdowns, real estate agents were able to close about seven thousand fewer contracts last year. There is little supply, a lot of people have to wait a long time before a suitable home comes on the market. On average, a rental apartment offered through an agent last year costs 719 euros per month in Flanders.

In addition, the demand for rental housing is increasing. The rise in real estate prices has forced first-time buyers to stay longer in a rental home. The corona crisis has also increased economic uncertainty, making buying a home feasible for fewer people. And divorces are also increasing the demand for rental properties. Couples who split up often move into rented accommodation temporarily.

 

The effects of the coronavirus on real estate

Resilient real estate market

The number of transactions during one quarter fell sharply during the financial crisis in 2008. After that, the market recovered quickly. There is a chance that the real estate market is proving as resilient now as it was then. As a matter of fact, since the 2008 crisis, the demand for real estate has only been on the rise. While some will now postpone the purchase of their own home, it is expected that this drop in demand will be more than compensated by investors looking for stable returns.

Apartment market oversupply

In Flanders, an oversupply of apartments is looming especially in the smaller and less centrally located towns. In many places in Belgium, there is a shortage of houses. Experts warn of the ever-increasing likelihood of a local oversupply in Flanders on the apartment market.

They point to the large supply. Since 2011, the residential new construction market in Belgium has been on the rise. The increase is almost entirely due to apartments in Flanders, according to an analysis of the figures on building permits for the past 12 years by Statbel, the Belgian statistics office. This increase is in line with the interest of the Flemish people to invest in an apartment to rent out.

Some 40 percent of new apartments in Flanders are built in the center cities. Another 20 percent are being built in residential towns like Aartselaar, Affligem, Grimbergen, Jabbeke or Zandhoven.

According to experts, the shortage in the cities is most acute in Brussels and Ghent, followed by Antwerp. In contrast to Brussels, building in Ghent is very vigorous. Also houses. In no city were more permits issued for houses, apartments, and renovations than in Ghent.


The effects of the coronavirus on real estate

Match supply and demand

Immowi tries to fill in the gap between supply and demand. Our goal is to match the right buyer with the right seller as smooth and quickly as possible. We generate quality leads for our clientele through our Immowi Algorithm and offer these leads on our user friendly platform MyImmowi. Looking to sell real estate? Register and have a look.

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There is often an invisible wall between marketing and sales. Companies invest in marketing campaigns to generate leads, but do not take the right actions to turn those leads into customers. To remedy this shortcoming, the strategic online lead generator Immowi is adding a new extension: Immowi Assistance. Until now, we delivered high quality leads thanks to online marketing, but with Immowi Assistance we significantly increase the chance of these leads actually becoming customers. Thanks to this approach, companies that do business with us know how to convert their leads and have a platform where the leads are offered on a silver platter, ready to be converted into valuable customers.
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We could make it easy on ourselves and be happy with just bringing in high-quality leads. But it’s frustrating when your hard work doesn’t follow through. Immowi’s great strength has always been that we are very results-oriented. Many marketers have a reputation for selling hot air, because they can’t substantiate their returns. We did that right from the start, and that’s why we were able to grow from one to more than 10 full-time employees in a very short period of time.
With MyImmowi we just go one step further than what classic lead generators do. We go to the point where a lead becomes a valuable prospect. We help our customers convert their leads into customers.
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MyImmowi builds the bridge between marketing and sales. We Make it as easy as possible for the client to contact the lead. You have to keep them warm. If you let a few days or even weeks pass between the moment a lead shows interest in your product and the moment you contact that lead, you will lose him. Then your success ratio will remain low. So, we try to immediately set an appointment in the diaries of our clients’ salespeople. You have to strike while the iron is hot.
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Sales people like to sell, but they thoroughly hate administration. They keep track of their leads, their appointments and their deals in Excel, or even with pen and paper. They only keep track of their own prospects. Many companies do not have a sales pipeline. So, you risk sending a quotation to a customer after a successful meeting, but ultimately missing the customer because you forgot to follow up on the quotation. You’re almost done, but because of the lack of a decent digital process you miss out on a customer – and therefore also on turnover.
We pick the low-hanging fruit for our customers. We automate the entire process from lead to customer, and put it into one clear dashboard. This way, as a business manager, you can follow everything from A to Z. How many leads does a campaign produce? How many of those leads drop out along the way? How many become customers? What stage is each lead in? The personnel cost of sales people is very high in many companies. If sales people do not lose time calling leads and recording appointments – which we do – they can focus on what they are really good at. And that is still selling, closing deals.
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We bring marketing and sales under one roof. That way, you can make your campaigns much more effective. Imagine that your campaigns for one brand on Facebook and on Google both generate 10 leads, but that 8 of those 10 Facebook leads become customers and only 2 of those 10 Google leads. If you’re purely marketing, you won’t get that information and so you’ll continue to put the same amount of effort into Facebook and Google.
If you also include the sales part and you do get that information, then you can turn the right buttons, redirect your budgets and generate much more turnover.