Can You Buy Property At Half The Price Post Covid-19?
There’s no question about the impact Covid-19 has made in our economy, including the housing market. In fact, plenty of real estate buyers and investors are wrestling with this question. Is it possible to buy property at half the price after the coronavirus? There have been so many stories of people either buying or selling a house, but was put into halt mid-negotiation because of the pandemic, and now they’re faced with the uncertainty of whether they can continue where they left off, or perhaps face the reality of correction in prices because of the current condition. So what should you do?
Well first things first, before you make any decisions here are a couple of things you should consider.
Under normal conditions, buyers and sellers determine the range of prices based on housing demand, earnings, mortgage availability and their expectations on the market’s direction.
It was easier to predict the market outcome back in 2008, because the downturn or the recession was due to economic reasons. However since we’re dealing with a global pandemic, there is still a huge uncertainty on what’s going to happen over the months ahead. If there is a resurgence with the virus, that means there’s a higher risk for business closures, loss in jobs and of course knock down on housing demands.
With that said, most real estate agents have already predicted a price fall between 3%-10% from June until the end of the year. Some buyers would even ask for aggressive discounts of 20% or more, although most sellers can simply walk away with lowball offers until they find a better deal.
Now with all of that being said, does that mean this is the perfect time to invest and buy properties considering the prices are projected to go down?
Yes, you could but also with certain conditions.
You have to be aware that if you buy or invest in a property right now means you won’t see returns on your investment for the next 6 months or even a year. In fact, based on recent forecasts, they see the housing market rebound around 2021 or 2022, so if you’re expecting immediate returns on your investment, perhaps buying a property now might not be the best decision. Why? Because while you might benefit from the sudden decline in rates, this benefit is also offset by the decline in buyers or renters.
So you must truly take the time to truly consider whether you’re ready to invest and buy a property today. But does that mean that you have to wait until market conditions are better? Well here’s my two cents on it. Buyers should never wait. What you should be doing instead is changing your strategy and adding more value for your target customers. That way, you can attract moderate income people and renters. It is the best time to buy every day as all property prices and rentals will pick up when the market does and you might have equity which is some money you can use for your next deals if you bought property at a discount.