The term recession is well known in the economy and Real Estate fields of studies or professionals.
The history has shown that somehow every once in a decade a deep recession happens. But what does that actually mean, how does it affect Real Estate Market and what is predicted to happen during 2020 in the Balkans Real Estate?
Recession is a different way of saying the economic crisis. Many people remember the deep and black crisis of 2008, and everything was not very good during 2018 as well. Many people lost their jobs because small and big companies were closed, an extreme bankruptcy was all over the news and people were not having access anymore to their savings. Imagine the strong collapse of financial and psychological crisis people were living in and had nothing to do about it.
Just like that, the Real Estate market was and will always be affected by these types of economic downgrades. A whole new strategy is followed by the market in order not to lose the value of their most part of the business. Everything started in the US but the whole world felt the need for a union and stress-free marketing strategy plan.
- Unemployment
Just like in every other market and field of professionals. Real Estate agencies feel the need to reduce the number of people working for their market. It happens also in our everyday life, that unemployment is the main activity to take care of because it reduces many expenses and helps save money for future investments.
- Fewer investments
Nobody thinks about the next recession. Nobody thinks about what will happen in 2020, and wages are scarily not going up at all. People can hardly afford to invest in properties because young people invest more in their education and international investors “are keen on” building luxurious properties. High-interest banks are willing to decrease the number of loans, which means that even investors will have multiple troubles to loan money and start building new houses.
- Loan takers
A low number of loan takers. Why does that happen? Imagine loaning a lot of money to buy a new apartment in the Balkans. When the recession happens and a great percentage of the loan takers are unemployed, they are somehow obligated to sell their apartments in order to afford the expenses and rent a low-priced apartment. Selling a property during a recession doesn’t give you the possibility to gain the first and real price it had, but a lower one and as fast as you can. How will you be able to pay the loan you took from the bank with less money left?
