The real estate sector in 2021 is facing notable seasonal downturns that are dropping big bombs on the sector. But is this really the case? Or are there other factors at play too?
The property market in 2021 is suffering from an overall lull in activity due to the Covid-19 pandemic. The reality is that the effects of this pandemic are being felt in both residential and commercial real estate markets. In addition to the pandemic, the seasonal aspect of the industry is causing further disruption.
For starters, the winter months bring about a noticeable slowdown in most property related activity. While buyers and sellers often try to get in as many deals as possible before the cold weather starts, this year is different. The lack of consumer confidence due to the pandemic has resulted in buyers and sellers being cautious in their decision making process, resulting in high levels of uncertainty. This has caused the housing market, including existing and new home sales, to dip.
On top of this, the demand and sale of rental properties is also experiencing the same decline. As many people are struggling to make ends meet and have to consider downsizing their accommodation, rental properties are seeing fewer takers, leading to oversupply in that sector.
The commercial sector is also not faring much better. With the closure of non-essential businesses, the demand for office, retail and leisure spaces has dropped significantly. The period between June and August typically accounts for the busiest period in terms of real estate, but this year has been an exception due to the pandemic.
Overall, the real estate sector this year is facing major seasonal drops due to the pandemic. It is becoming more challenging for buyers and sellers, landlords and tenants to make informed decisions and move forward with transactions. Nevertheless, it is not all doom and gloom. The sector’s resilience could lead to a rebound once the pandemic passes. So while there is still a long way to go, the sector must continue to focus on the long-term picture even as it navigates these challenging times.