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For the real estate market, it is important that the second wave does not lead to a large wave of corporate bankruptcies or much greater concerns spreading to the financial markets.
The pandemic affected much of the service sector and industry in the spring and it was feared that, with some delay, it would also hit the real estate sector hard.
Commercial property owners with exposure to retail were quickly hurt when customer profits were snatched away. Owners with office exposure were affected by more uncertain future prospects when the task became a clearer norm, as well as more expensive financing.
However, once the dust has settled, Handelsbanken sees that many of the lasting effects of the pandemic are actually a strengthening of the structural changes that were already visible before the crisis.
These are, for example, increased e-commerce and increased digitization. For the real estate market, this may mean that the trend towards smaller office space per employee strengthens while the demand for commercial premises and hotel properties declines.
The demand for office space is changing. Offices are expected to remain the foundation of the business and will likely be supplemented with tasks.
Handelsbanken sees that there will continue to be demand for office space in city centers. But less need for office space and a change in office habits also mean more vacancies and downward pressure on room rents.
In the housing market, prices have recovered since the outbreak of the pandemic and the number of home purchases is record.
The underlying demand for housing remains high, while large stimuli have supported household incomes and contributed to the fact that loans to households were not restricted during the crisis.
Handelsbanken believes that the housing market is entering a calmer phase, but that prices will continue to rise slightly.
After the decline at the beginning of the pandemic, prices have recovered and the number of home purchases has reached a record high.
Unemployment has risen rapidly, although it appears to be lower than feared. The covariance between unemployment and house prices has been weak. There are probably several factors behind the deterioration in the labor market that are not reflected in house prices. Among other things, the crisis has cemented the image that low interest rates are here to stay.
