Global real estate market during the pandemic. Interview with Walid Moussa
Walid Moussa is one of the most famous person among real estate professionals. Mr. Moussa is a World President of FIABCI 2019-2020, President of FIABCI Arabic Countries, President of REAL (The Real Estate Syndicate of Lebanon), CEO of PIM & PBM. Now he is establishing the Association of Mediterranean countries, but all the details will be announced a bit later.
Alena Marynenko, CEO of REALTING, interviewed Walid Moussa and asked him about the development of global real estate market during the pandemic.
— What’s happened to the different categories of the Real estate sectors in the world? How has the coronavirus affected the real estate market?
— To evaluate the global real estate market we need to divide it into categories.
1st — retail. This category really suffered and there were a lot of retailers who had to close their businesses at all (e.g. JCPenney). In the USA luxury brands couldn’t afford paying rental use in the high-end areas and into commercial centres any more. But on the other hand we’ve saved an expansion of the FMCG business: supermarkets and pharmathetics.
There would be a close relationship between landlords and tenants in order to settle unpaid use because we still don’t know what is the future of this pandemic. Of course, we need to get vaccinated, but in my opinion landlords should keep close relationships with their tenants in order to find a solution for the unpaid use of commercial real estate renters.
2nd — hospitality sector (hotels, restaurants). It suffered a lot worldwide. Only a few countries are open for tourism. Internal tourism has developed: that was even impossible for many people to travel outside the country. The business seemed to start again but nevertheless now it’s not the same demand on tourism, travelling and going to restaurants. In summer 2021 some European countries promise to open cafes, restaurants and so on and we will see the results.
There’s still a lot of fear of travelling and getting far away from home. We need to wait.
Short-term rentals and businesses like airbnb are really affected. In 2020 the income was 50% lower than in 2019.They have to remove 35% of employees. Unfortunately, people and businesses need to adapt to new situations.
3d — offices. Surely, the level of the market is lower than before. The prices decreased because many people started working from home. And in the future many of them would prefer to stay at home: less traffic, less expensive for both employers and employees, less time spent on the way to work. I think that there will be two categories: employees working from home and people working from the office.
The pandemic affected us psychologically. Now we want to be more independent and not so close to each other. That’s why we need to have new designs in shared offices and have more personal space both for staff and clients.
— How is the global real estate market developing now?
— Now everything is online: shopping, work and even conversations. And some businesses really became more successful.
— How has the residential real estate market been developing? In which countries have prices increased / decreased significantly?
— We can divide residentials on three sectors:
- Primary homes. It’s about psychology a bit. People psychologically need homes to feel safe.
- Secondary homes. It’s about buying houses outside the city: near the beach, mountains and so on.
- Affordable housing.
Now there are some countries in which the government is obliged to create policies for social and affordable property. E.g. Saudi Arabia gave millions of km to the Ministry of housing to organize them and do some joint ventures with the private sector to create affordable housing for its people.
In my opinion, it will be more and more popular around the world.
What concerns prices, I’ll describe the situation both in commercial and residential markets. The changes of prices were different: in some countries increased, in others decreased.
In regions dependent on inner buyers the prices went up. In the USA the prices went 25-30% up, in the Philippines — 40%, in Mexico — 5%, in Germany — 50%. In the Us, for example, there was a big demand, but a lack of local products.
In some other countries the situation is not so nice. The prices went down in Portugal (25%), Egypt (17%), Greece (20%), Pakistan (4%), Malta (3,5%) and so on. It happened because the prices here depend on international investment.
— Which countries are the most attractive for investors in this COVID period?
— There are a lot of opportunities in a crisis. If a person is risky, it’s the best time for him to invest in Portugal or Greek property for example. But if somebody prefers stability, it’s better to wait.
Last year there was a slow decrease of prices on real estate in New York. But now the market is developing again.
I also would like to speak about real estate in London. There is a strong market and lots of people still need housing. But of course, nobody knows what will happen in the future.
I can not predict what will be after the crisis. I hope that our sphere won’t be affected so much. It may be rather difficult, because many people and businesses will have to get back to reality, especially in european countries. In the EU and in the USA the governments decided to subsidise the businesses and helped them with money.
After that stops we need to see what will be the new reality.
— In your opinion, how can people find a reliable realtor or developer?
— A good realtor is a member of FIABCI. FIABCI is an umbrella organisation for all real estate professionals around the world. There’s a really exciting network inside this organisation. It’s present in 72 countries!
When somebody is looking for a good specialist, this person has to be sure that a broker/real estate agent is a part of an organisation that is licensed and has qualification criteria to be trustable.
Speaking about developers, it’s really important to make sure that this developer is reliable. That’s why I always say:
When you are investing in a new country, take the advice of a realtor or a consultant. He will recommend you a good, reliable company.
What concerns me, I’m lucky to have so many friends all round the world. And I cannot wait until that pandemic is over to be able to travel again. I pray every day for my family, friends and colleagues to stay safe.
Walid Moussa appointed as World President for the International Real Estate Federation
— What advice can you give about choosing the right property for investment?
— It depends on your character and specialization.
Commercial properties. Lots of people think it’s a good opportunity to invest in commercial real estate, because the prices went down. And they think that after this difficult time they will have a higher return on the investment on the rental side.
Residential. It’s better to research real estate in prime markets that are getting developed. E.g. suburbs of London. People there can afford to buy houses. The same situation with the US. Of course you can take a risk and buy property in Spain, Portugal and Greece. Even though they are european, they have a drop in prices.
In arabic countries Dubai is an interesting place to invest, but you need to know the market very well. And you have to know how to invest because there’s a lot of offers in Dubai.
Bahrain could be an interesting place as well. It’s a good place to live in and to have some business here. Saudi Arabia is having a lot of changes! People will buy a lot of homes there. They try to create new cities, new attractions and as I’ve already said, affordable housing. And of course it will be more open for foreigners and more attractive to locals.
On prime markets the profits are low, but the properties are more liquid. The capitals of such countries as France, the USA, Great Britain are always stable and have liquid properties (with low income, but could be sold very fast).
— What do you think, which type of property is the most cost-effective for investors: hotels and restaurants, offices, residential etc. ?
— Difficult to say. People really need to have houses. But from the other side I see service centres where everything is online.
These service centres for servers are a booming business now.
And, of course, healthcare is a very good thing to invest in. During the pandemic we understand that health is the most important thing in life.
— In 2021 what are your expectations for investment?
— To be honest, it’s difficult to have expectations, because the future is uncertain and we don’t know what will happen to the world with the pandemic. I cannot really predict, because things are related.
What is for sure — the residential market will stand strong demand for housing. This sector will stay better than other sectors. Warehousing, healthcare, logistics and service centres could be interesting spheres to invest in. But again, I’m basing my predictions on the actual situation.
— Is it profitable to invest now?
— If you know how to invest, you will be able to invest money.
— How have international real estate companies been affected by the pandemic?
— To be proud, I can say that the real estate sector was one of the sectors that were less affected by the pandemic. But we don’t include the hospitality sector because it’s totally linked to tourism. Residential real estate market was positively affected.
— Do you think that real estate transactions are moving online? Or is it just a fantasy?
— Usually fantasies become reality. The real estate business has shifted to technologies in recent years. Now real estate companies cannot work without CRM, linked to the web-site and social media. As for marketing the portals and social media play a very important role/ You can reach somebody who is thousand kilometres far from you. You should know whom to target, with which portals you should work, which social media you should use and, of course, which products you offer.
If you combine these things, you know how to find your client abroad.
Many realtors succeed using special applications and technology using the right portals like REALTING. Now most of the clients want to see and feel the property. But this will be the last step — just come and check.
— Walid, as a trusted expert, what advice can you give to your colleagues?
— The first one is to get vaccinated.
As for the business — always believe in the sphere. The real estate business will never disappear. There are always ups and downs in the market. It’s normal that some businesses are not as good as others. But we should always believe in the sector, work on ourselves, educate ourselves, learn how to work with social media, how to work with technologies and try to find courses locally and internationally and always stay positive!
We are lucky to have so many technologies and online services.
To hear the whole dialog you can watch the video. If you have any questions to Walid Moussa, you can contact him on Facebook or LinkedIn.