In the last year there has been an upward trend in property prices in the area of Guardamar del Segura, which has not been proportional throughout the city, but has been more pronounced in the area of the beach and in the Urbanization of Raso (due to the type of product), reaching annual rises of approximately 15% over the same period last year and approaching 2007 prices, less pronounced in the area of the town centre, Mercadona area and sub-7. The uncertainty of what is going to happen in the next six months in a situation of rising interest rates, rising mortgage rates and less money available in the pockets of European citizens, is what worries the real estate sector. Our prediction is that second-hand property prices will not continue to rise at the same rates as last year and will moderate. New construction will depend on the cost of building materials, which in turn is related to production costs affected by energy prices. Therefore, we do not expect them to fall or stabilise in the short term, but rather to rise again. But we are optimistic and do not expect the market to decline in demand by more than 5%.

We are about to start autumn and unfortunately the worst expectations are being met. The number of infections continues to rise, with toilets exhausted by overcrowding and mediocre resources. Many borders are closed to Spaniards and a majority of countries are recommending that their citizens do not come to Spain, which is a very unsafe country from a health point of view.   In the Mediterranean area where we work, the dependence on tourism is total, and after the summer with a third of the influx basically of Spanish residents and very few foreigners, the drop in economic activity is enormous and is going to get even worse in the coming months, which means that many companies are going to lay off staff and close down. As far as the property sector is concerned, in our opinion, national demand had remained alive in the post-confinement months, but we have already begun to appreciate the drop in property activity which, together with the tightening of mortgages in the coming months by the banks, we think will produce a notable reduction in purchases and sales. The real estate agencies and promoters specialised only in foreign clients are practically on "stand by", with demands that they cannot meet due to the impossibility of travelling to our country. With all this scenario, we believe that there will be a price adjustment in the big cities that have suffered large increases especially in the last two years, a slight adjustment on the coast due to the fall in foreign demand and that to a greater or lesser extent its value will depend on what prolongs the pandemic. For companies like ours, all that is left is to pull out all the stops, work constantly and tighten their belts.  

I have been reviewing the real estate transaction data in the records for the first quarter of this year compared to the first quarter of last year in the Costa Sur area of Alicante, to see what impact the COVID-19 has had in the quarter of this year. Last year in the first quarter 2904 property transactions were recorded in our area, in the same period this year there have been 2576. As you can see there is a reduction of 11.30% . Now we need to know about the second quarter of this year which, as everybody expects, will be a disaster and when I have them, I will possibly expose them.  It remains to be seen what will happen in the third and fourth quarter. And now I am going to wet myself by giving a prediction according to the parameters that I interpret.  July, August and September the transactions will continue to be below normal. The fourth quarter will be slightly lower than last year's quarter and at best it will be equal to last year's quarter. All in all a 35% drop from last year.  Note : Data obtained from Santa Pola, Guardamar del Segura, Torrevieja, Orihuela and Pilar de la Horadada.  

This crisis, like the virus that has produced it, is unexpected and nobody really knows how it is going to end.  We can make forecasts, analyse data, implement financial programmes in the medium and short term but in the end I come to the conclusion that everything is as unpredictable as the virus itself. And why? Well, nobody can guarantee what is going to happen in the medium term in the next 3-9 months, how many people are going to be on the unemployment lists in the next few months, and how many companies and self-employed people are going to succumb in that time. The government knows, although sometimes I think it does not realise (we only have to look at the latest statements by Minister Garzón and the Minister of Labor) that, in the coming months, the absence of social unrest depends on the surviving business fabric and the maintenance of jobs. The above is being attempted with the ICO credit lines partly guaranteed with European funds, and this in my opinion is correct in the medium and short term.  The problem is that the vast majority of companies and self-employed workers have just recovered from the macro-crisis of 2008, which lasted almost a decade, during which they gradually reduced their debt but did not finish paying it off.  At the moment, their activity has suffered a "crash" and the companies have to refinance again because their survival depends on it.  What strength has the great majority? I fear that they cannot survive beyond a period of one year.  And in my reasoning I foresee that for the real estate sector this year has ended, or will end, with hardly any activity. The same thing has happened to the government, but with the difference that instead of reducing the debt they had been increasing it, and previous governments did not reduce it to the extent that they had to arrange the European programme. The result is an over-indebtedness that is going to bring about considerable changes in the administration, and in my opinion, very hard decisions will have to be taken if Spain is not to be declared bankrupt. The question is, if there is a resurgence or several resurgences and we have to go back to total inactivity, will small and medium sized companies be able to survive beyond 9 months? It is almost impossible, so if 15,000 real estate companies have closed right now, in the next 9 months it could be more than double that number. But back to the beginning, it's all conjecture like the virus itself.