The COVID-19 pandemic has had a far-reaching impact on the economic situation worldwide. RE/MAX Europe’s most recent survey interviewed more than 2,000 top RE/MAX agents and brokers from 27 countries about the implications of the pandemic on European real estate valuations and transactions.
COVID-19 has caused a lack of confidence in the market. There are fears of an economic recession, and unemployment figures are on the rise. The overall expectation is that most European countries will not recover by the end of the year, but the current situation is not a typical economic downturn. The real estate market has proved it is crisis-resistant on numerous occasions and real estate will continue to be a good long-term investment, as it historically has been.
The results of the survey show that COVID-19 poses a challenge for the real estate industry. Most agents questioned expect rental and sales prices for residential and commercial property to drop in the next six months. For rental property, countries predict a price decrease of mostly between 5-10%, with apartments in urban areas more affected than family houses. Only Germany and Switzerland are predicted to outperform other markets with no change or a small increase in prices. A similar situation, albeit somewhat more positive, is seen with the development of sales prices. Most countries expect price decreases, mostly between 5-10% and larger for apartments than for family houses. However, Germany anticipates a price increase of 10% for apartments in urban areas and no change for rural areas. France, Finland, the Netherlands, Turkey and the Czech Republic also expect a small price increase for houses, both in urban and rural areas.
Response from the survey shows less optimism for the commercial sector. Lockdowns, the collapse of tourism and the increased shift towards working from home have impacted this sector more harshly. The survey shows that agents anticipate 20% fewer transactions and a price drop of between 10 and 20% (rental and sales). It is too soon to predict when the real estate market will get back to pre-COVID-19 levels, especially because the situation is different from country to country. However, even with property prices falling, real estate continues to be a secure investment with a good return.
Contact our agents for any additional insight on the current property market situation in Montenegro.