E1 Investments Meeting

Influence of the corona virus on the real estate industry

E1 International Investment Holding GmbH from Wiesbaden informs about the effects of the corona virus on the real estate industry. According to the managing director of the company specialising in off-market real estate, the current situation makes it necessary to show solidarity. In order to slow down the spread of Covid-19 and thus not to endanger risk groups such as people in poor health and the elderly, appointments with E1 brokers are currently being postponed as far as possible.

Wiesbaden, the 16.03.2020

Health of all stakeholders is a priority

Real estate industry Corona Virus – nationwide shutdowns are currently being implemented. In many places, public life is virtually at a standstill. Orphaned train stations, closed bars and gyms, closed schools and universities – the federal government and the individual states are doing everything they can to slow down the spread of the corona virus. Since neither a cure nor a vaccination is currently available, a simultaneous infection of millions could severely overload the health care system.

Millions of workers are therefore now working in home offices and avoiding too close contact with other people. E1 International is doing its part to contain the pandemic. Personal appointments are currently limited in order to minimize the risk of flu viruses spreading. Services without face-to-face contact continue to run almost without restriction – as far as the supply chain of external partners such as financial service providers allows.

No visits – what are the consequences?

Real estate industry Corona Virus – E1 International is still present for its customers. Appointments that require viewings are currently being postponed. This explicitly does not mean that transactions will not take place due to the pandemic. There is only a time delay. This also does not apply to all transactions. E1 asks for your understanding for any inconvenience that may arise. A fixed point in time when everything will be back to normal cannot be seriously estimated at present. After all, the situation of corona spreading can change daily.

Will property prices fall because of Covid-19?

Real estate industry corona virus – The real estate market is affected with a time lag in times of economic downturn or crisis. It is difficult to predict at this point whether there will be only a slight recession or even a sharp drop in GDP in 2020. After years of steadily rising property prices, no significant cooling of market activity or price development is known at present.

What is known are the considerable sales losses in the hotel industry worldwide. Despite announced government aid for tradespeople and employees in the entire hospitality industry, market movements are to be expected. Investment properties in the hotel industry could come onto the market due to payment difficulties of the respective companies.

E1 International has a high number of interested parties for hotel properties, especially in central locations in large cities. Properties of this type could change hands so quickly (and initially unnoticed by competitors) through E1’s investment brokers. To what extent the relationship between supply and demand will change and thus influence the purchase prices cannot be estimated. What matters most is how long the SARS-CoV-2 will keep the global economy on tenterhooks.

What do the border closures mean for the real estate industry?

Real estate industry Corona Virus – The crossing of borders into Germany is currently severely restricted for foreigners, as is the other way around. Of course this has consequences for internationally operating companies such as E1 International. However, face-to-face business trips are no longer as important as they were a few years ago. Video conferences and a fast document transport through the internet have replaced many personal contacts. Transactions can be prepared almost as usual.

However, there is no denying that transactions are slowing down or shifting. Buildings are finally inspected before a purchase, signatures are often provided directly and in person.

Will the economy as a whole collapse?

Real estate industry Corona Virus – Entire supply chains are breaking down in China and Italy. Whether the economy there will recover so quickly is difficult to answer. However, the simultaneous collapse of stock market prices around the world, the flight into government bonds and interest rate cuts by central banks can also give the real estate industry a strong boost. Ultimately, real estate is a value that is always needed and will survive times of crisis. They offer an alternative to shares and derivatives.

People will continue to live, shop and relax. In this country in particular, the state is in a position to support entrepreneurs and employees and to set up economic stimulus programmes until social life begins to return to normal again as a result of a halt to the spread of the coronavirus and a high immunisation rate.

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