COVID-19 : The Mauritian real estate market and the prospects for recovery
L’Express Properties interviewed Philippe de Beer, the CEO of Park Lane Properties, about his views and vision for the Mauritian property sector following the Covid-19 pandemic.
The Coronavirus is all over the news, and each of us follows with the greatest attention, the many statistics and facts covered - in particular, concerning the consequences on global economy and real estate investments.
EP: How did you organize yourself when the Coronavirus crisis affected Mauritius?
PDB: Our team quickly set up a ’work from home’ station, each of the employees creating a workspace in a dedicated place in their home. From the first Friday of confinement we were ready and active, on the job. We have adapted our working hours from the start so that we can also allocate sufficient time for our families and children, which at Park Lane we consider very important.
We also immediately set up new internal communication habits, including a multi-level videoconferencing meeting schedule, to stay in touch with the whole Park Lane team. This way, we can all see each other and get news of each other and assess how each team member is coping in confinement and share any difficulties in being operational or even any issues with their family. We also organize smaller working groups several times a week, with the aim of completing everything we have planned in our administrative and commercial strategy for this period of confinement which turns out to be extremely productive.
EP: What assessment should be made of the first fortnight of confinement? Is there a drop in demand (sale / rental)?
PDB: The demands have dropped drastically. The priorities of potential buyers and tenants have changed, it is obvious and all are postponing their research. In terms of volume of requests, we were in the last week of March, that is to say the 2nd week of confinement in Mauritius, at only 10% of the volume of requests compared to the period before Covid-19.
From February to March 2020, our requests for Mauritian citizens were reduced by more than 30% and our requests for foreign citizens by 53%. Our purchase requests decreased by 34%, and rental requests by 37%. Certainly these requests will continue to decline in the coming weeks.
EP: What is your vision for the market and what are your prospects?
PDB: In the short term, all transactions are for the time being postponed and visits no longer take place. There will be very few confirmation of purchases or rentals until the end of confinement. For those buyers and sellers who had already agreed on a price and terms before the containment was announced, there is some concern that the deal will still go ahead. Depending on the type of documents that have been signed to seal the transaction, some agreements may be questioned or renegotiated.
In addition, we can expect some sellers to choose to pause the sale of their property while waiting for a recovery and better days. Buyers may also be smaller in number for a few months.
It will take a little while to see the real long-term impact of Covid-19 on the real estate market in Mauritius and around the world, but we can expect a drop in the volume of post-covid-19 requests. It will take a little time to return to the same level as before the covid-19, but the price of real estate will not necessarily be impacted as a whole, or at least should not undergo a heavy decline.
Knowing the appetite of Mauritians for real estate investment, the market will certainly rebound and recover. But it is true that there is still some uncertainty right now. A possible slowdown. One wonders, for example, with the shadow of a possible recession and the impact that this pandemic will have had on certain households, on the ability and the choice of a good number of potential buyers to go into debt for a property purchase after covid-19. Lower interests rates and Government support measures on businesses and households loans might help to absorb some of that threat.
On the other hand, the more optimistic opinion is that real estate remains, for many, a safe haven compared to other types of investments, in particular the stock market. Some will choose to integrate real estate investment into their investment portfolio if this were not already the case, seeing the volatility and fragility of the stock markets in the face of this type of unexpected crisis. The fall in interest rates will certainly encourage some investors to grasp the opportunity to borrow and invest in real estate.
EP: What is your new communication? How do you address your target audience?
PDB: The real estate market is based almost entirely on human contact before the purchase or rental is finalised. This crisis therefore has a direct impact on our profession and our ability to close a deal. The signatures of authentic deed of sales in front of a notary and then the registration of those deeds at the registry office can not be done, so transactions cannot take place.
It is therefore important, pending the reopening of offices and normal economic activity, to keep in touch with our customers and those who trust us. This is what we are doing more than ever these days. We also continue to advise our customers on the fair price for the sale or rental of their property, with - if necessary - a visit to their property by video conference with them to give them a better valuation.
Digital communication tools and social media are important resources for wider communication, and telephone and other means of digital telephony is the alternative for more exclusive and individual contacts with our customers.
Additional remarks: this period of confinement allows us to also reflect on several subjects in order to make real estate transactions more digital in Mauritius: for example, the need to legislate digital signatures of certain documents such as promises of sale and even deeds of sale, through adequate digital signature platforms and softwares.
Read more here about the Covid-19 article: the vision of two players in the Mauritian real estate market and the prospects for recovery: https://view.joomag.com/lexpress-prope…/0016970001586528813…