The real estate industry is being clobbered by the coronavirus, and it’s going to get worse before it gets better, Phileleftheros reports citing experts.
Key players believe the extent of the effects will depend upon the duration of the economic shutdown and hope that the sector’s current freezing will only be temporary.
In fact, current circumstances are leading regulated members of the Royal Institution of Chartered Surveyors (RICS) to include ‘material valuation uncertainty’ declarations in their reporting and advice.
A circular issued by RICS on Tuesday said these declarations do not mean that members are currently unable to value.
However, valuations may reflect the restrictions that material uncertainty brings. And that these decisions are on a case by case basis.
Kyriacos Talatinis, chairman of the island’s Property Valuers Association, told Phileleftheros the biggest obstacle facing the totally frozen market today is psychological but also functional due to the imposed restrictive measures.
Professional bodies such as the RICS, International Valuation Standards Board and the relevant European body have issued circulars saying that given the unknown future impact COVID-19 may have on the real estate market, it is recommended that properties should be re-evaluated at regular intervals.
Although the pre-coronavirus crisis data is valid, the reassessment provision document should be included, he added.
“These are similar instructions we had back in 2013 (when the island’d bank system collapsed). When you are experiencing a period of uncertainty, frequent re-assessments are suggested,” Talatinis also said.
Asked whether they future price reductions in real estate, he said: “The economy is hit. What matters is the duration and depth of the recession.
“If it ends soon, the impact will be less than if it lasts for months. An impact is unavoidable, however, it would be risky to assess rates of a decline in property prices now.”