Summer is the time when most people head to their vacation houses on the North Coast or the Red Sea, fueling an appetite for first-time buyers and potential investors to hop on the bandwagon. But summer 2020 is unlike any other; appetite for leisure property purchases is somewhat suppressed during this supposedly “always-busy” holiday. This was mainly due to the Coronavirus crisis, which changed the facets of the Egyptian summer property market.
When Invest-Gate’s R&A team delved into the second-home market’s main pillars (i.e. supply and demand) to identify the extent to which the pandemic has hit this specific chunk of the Egyptian property sector, it appears that COVID-19 has struck a devastating blow to the overall economy and the vacation real estate market therewithal.
Businesses, however, are showing resiliency to difficult market conditions by pursuing more real estate projects and keeping up with the broad range of urban developments being undertaken across the North African country, in line with the state’s overarching development program.
Correspondingly, almost 27% of Invest-Gate’s survey respondents believe that this niche segment of the property sector is blowing hot and cold in spite of the COVID-19 shock, with demand for holiday houses dropping less heavily or not at all in the wake of this upheaval.
Despite the Coronavirus-related epochal effects, many first-time buyers are still looking for the perfect opportunity to become second-home homeowners. But still, the pandemic has indeed taken a toll on people’s aspirations due to the recent remote work policies, layoffs, and salary cuts, leaving them unable to bear the market’s high prices.
Real estate companies are now turning to the adoption of online systems to seamlessly embrace such workplace changes, after strictly adopting the government-dictated precautionary and physical distancing measures. This tumult also impinged on travel behavior and frequency of stays among most second-home owners (or 71%) for maintaining social distancing and precautionary measures by staying home and away from other people until it is safe to be around others.
Therefore, property developers are revisiting designs of vacation houses to accommodate the newly-introduced working-from-home policy. Many second-home owners, in tandem, see it much possible now to spend more time – whenever they can – at their summer residences and work remotely from there.
The pandemic, according to based on Invest-Gate’s latest study on second homes, has essentially altered consumer behavior in Egypt, pushing more clients to principally shop for basic necessities, hence less demand for vacation properties.
Despite all odds, there is still a segment that is currently opting to select the best holiday house in town, yet with an optimum payment plan, which should be catered to by all industry-related players to address their needs of becoming second-home owners; tailoring well-crafted offers and plans to attract as many buyers as possible should be a solid strategy.
In the end, it is safe to say that the novel COVID-19 outbreak has undoubtedly left a deep-rooted impact on the demand and supply pillars. It is, therefore, necessary for both developers and consumers to join forces to alleviate the pressure resulting from the current crisis.
Recently, Invest-Gate’s R&A team has conducted in-depth research on the second-home market amid the 2020 Coronavirus pandemic, thereby surveying about 101 customers and 15 Egypt-based developers to put together a summarized wrap up on this niche chunk of the local property sector, while also proposing survival strategies and tactics for a potential upturn in the near future. For the full analysis, click here for Part I and Part II.