Survey Spain quarterly Spanish property market report – April 2020 – Part I


 This is our 25th Report. Its style is very different from the previous ones, for reasons everyone knows of. In January, all we thought we had to worry about was the Climate Crisis and Brexit, but like the rest of the word, bar a few individuals apparently, we had no idea what was just over the horizon.

 COVID-19 and the actions to slow its spread, have changed the World completely.

Most importantly, we want to record our appreciation and admiration for the ‘frontline’ medical, caring, cleaning, transport, shop staff, police, and all the others who put themselves at greater risk, so that we can live our lives as best we can; and for some with the illness, have a continued life to live. The evenings’ applause is a small sign of our appreciation and hopefully, in future, society will reconsider the comparative financial rewards that these mostly low paid workers receive. They are the ‘worker bees’ without which our ‘hive’ will not survive.

Locally, over the last three months, international travel having all but ceased, populations have been ‘locked down’ in their homes, and all leisure, hospitality and catering establishments have been closed indefinitely. Normal life on the Costas and Islands has effectively disappeared. The commercial ‘reason for being’ has been taken away.

  • The effects on the Local Populations’ Income, expat and Spanish, have been total. Many have seen income stop as if a tap has been turned off, with scarce if any savings being used to survive. Time can hang heavy as day and night schedules melt into each other, one day merges into another; and as for which day it is, who knows and who cares!
  • Others, both individuals and businesses, have found that home working is possible, with some enjoying and learning from the experience. The ‘inconvenience’ of being interrupted by family, is countered by the time savings of not having to commute or even get dressed! Using the time for concentrated learning or just tidying and doing the 101 ‘someday’ tasks, have led some to wonder if life shouldn’t be more like this ‘after’.
  • All are thanking the internet, from the depth of their being. Without that, we really would have developed ‘cabin fever’, though what state of hairstyle and colour we will emerge with will be interesting. Hairdressers will be the most in demand when they are permitted to start ‘shearing’ and we are permitted to visit.
    • Survey Spain have been adding as a standard clause to their building survey and valuation reports, that a fast internet connection can make a difference to whether a house is bought or not. There will be even more scrutiny after this, with large spread-out villa urbanisations perhaps having to subsidise providers to ensure that fibre optic cable is available for all.
  • Releasing restrictions gradually will bring life back to normal for some, though many will be depending upon Government assistance and regulations for fixed cost deferrals, such as rent and mortgage payments, to survive financially. Others who ‘slip through the net’, will be depending upon charities and other organisations for actual survival, with their provision of food, clothing and shelter – the basics of life. Never forget how lucky you are, only having to sloth about in the house all day. The alternatives are not attractive.
  • The local economy is taking a huge hit and it will be years before it can come back to provide the employment and services that it used to. However, natural entrepreneurial energy, though not assisted by the incomprehensible attitude of the Government to autónomos, the source of so many jobs and considerable tax income, will see the Costas and their people, plus a few more we suspect, bounce back to cater for the demand that will certainly return.
  • The natural advantages of the area are still here, enhanced by the reduction of human interaction, showing us that nature doesn’t need us and can cope quite well, thank you. Hopefully, we can learn from this and blend our living with nature, rather than looking upon it as an inconvenience. The nature of tourism, upon which we all depend, be it for a season, a week, a day or two, or a lifetime as an expat, must surely change when it restarts.
    • Climate Change inexorably is affecting our lives and the virus hasn’t changed that to a major extent. We must think of our individual effects upon the environment when living our lives, including constructing and using the houses we live in and where we work and play. Reductions in energy use and CO2 are still vitally important, though they have been pushed off the headlines for now.

Internationally, the effects have been global, and the world economy has and will continue to take a huge hit. As we write, Texas oil price has dropped below zero, with traders having to pay to have it taken off their hands. International commodity trading is a side of finance that we don’t often think about, but it can have huge effects upon our lives.

  • Airlines are the business sector, most immediately affected and they are the ones that have created the tourism of the Costas. Ryanair, easyJet, Jet2, etc, and their other Northern European equivalents, love ‘em or hate ‘em, without them there would be little tourism. Living here with any family ties in the ‘old country’, would not be acceptable, without quick and relatively inexpensive social and business flights back ‘home’.
    • How many survive, who fills the gaps, and when they are permitted to fly, will dictate the start of the resumption of ‘normal service’. It will be a mix of tentative and elated, with some hesitant to take the risk, whilst others just ‘gotta get out of this place’ and are desperate for the warmth, sun and escape that a holiday will bring. Without a reliable vaccine it will happen much more slowly, as the World population gradually accepts that the COVID-19 virus is just another risk of living life.
  • Financially, individuals, businesses and Governments have taken huge hits. Strangely, exchange rates haven’t yet varied significantly, perhaps because all World economies are taking the same measures so they all ‘float’ at the same level. Unemployment in most countries has risen substantially, with businesses laying people off as they try to survive. Despite Government assistance, they cannot instantly come back to the same level when restrictions are eased. Many will also take the opportunity to change how they work, so there may no longer be jobs to go back to.
    • Some businesses will have gained significantly, such as health service suppliers, Amazon and the like, so they can take up some new staff. Governments should also have learned that the Global, ‘just-in-time’ economy is there as a support to a national manufacturing base, and not a replacement for it.
  • Tourism’s recovery is likely to be gradual and it could be a couple of years before health concerns and economies, personal and national, enable visitors to come in the numbers we depended upon before. However, there will also have been much soul searching as to Life/Work balance in many families, and it’s likely that we will see more coming over to start a new life in the ‘California of Europe’.
    • Brexit’s deadline could create a mini boom. After weeks of surfing on the internet, many should be well informed and know what they want. Inevitably though, there will also be the naïve, spur of the moment dreamers, who will require elementary guidance and even protection from themselves.

As for Property – Read Part 2.

* This article has been written by a third party not owned or controlled by Spanish Property Insight (SPI).
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