It all started in Wuhan – China in December 2019. By early 2020, it spread into Europe and the USA. Italy is severely hit by it. Iran is suffering hugely. Russia is still denying it. France seems to be acknowledging a bit late the implications of it. Lebanon is in the eye of the storm today. COVID-19 is the number one discussed topic worldwide nowadays with huge health & economic impact worldwide.
A Global Pandemic
Between 1918 and 1920 a disturbingly deadly outbreak of influenza tore across the globe, infecting over a third of the world’s population and ending the lives of 20 – 50 million people. Of the 500 million people infected in the 1918 pandemic, the mortality rate was estimated at 10% to 20%, with up to 25 million deaths in the first 25 weeks alone.*
100 years later, WHO announces COVID -19 outbreak a pandemic. Mortality rate so far varies between less than 1% (South Korea) and 5% (Iran) depending on how steep the curve at which the disease is spreading rendering the medical corps at the said country able to treat infected patients.
As such, the mortality rate is way lower than the influenza or Spanish flu as it is known; yet, we are living in a global village with thousands of flights internationally between all countries – which has led to a fast outbreak of the disease. Social media and news coverage has made the people across the globe highly aware of the disease. Panic has enveloped the globe. Flights have been stopped, social distancing recommended and full lock down is seen as the only effective way of stopping the spread of this disease so far.
A Global Economic Disaster
Well, people have confined to their homes. Restaurants and Malls have closed. Workers were asked whenever possible to work from home. Flights have paused. Factories have stopped working at full capacity. The globe seems to be pausing altogether. Gas & oil prices are at their lowest. Stock prices have plunged.
Economies are suffering!
Coronavirus will bankrupt more people than it kills – and that’s the real global emergency – as per “Independent”.
Implications on Real Estate
It is undeniable that real estate transactions across the globe will be hit in the near future. Showings are less feasible given the recommendation of social distancing. Closing a deal usually involves many players: the buyer, the seller, the real estate agent, the bank, the notary and the clerk at the register… to name only a few. It is hard given the current pandemic situation to meet with all the players and get the transactions done (that is assuming that all players are indeed still performing their normal activities).
It is too early to assess the long-term impact on real estate following coronavirus; as we don’t know yet how long the pandemic will last or when will the break of a cure or vaccine will happen.
A special note about Lebanon Real Estate
Lebanon has started a two-week full lockdown on Monday March 16. Banks will be operating at their minimal capacity. Real Estate registers and many government administrations are shut down for the moment. Solutions such as obtaining some legal documents via Libanpost are starting to be discussed. Showings are minimal given recommended social distancing.
Real Estate transactions will definitely be impacted in Lebanon – similar to the global situation; Yet, given the other factors preceding this pandemic outbreak – notably the capital control and the continuous fear of a haircut – it is expected that the Lebanese real estate transactions will be less hit than worldwide; For one, because the pandemic happened at a time of peak transactions given the distrust in banking sector in Lebanon; For two, because the Lebanese people are expected to adapt more quickly to this new situation and find creative solutions.
One Final Positive Note
Amidst all the negative implication of Coronavirus, we cannot but acknowledge the lower level of pollution observed worldwide. Pollution levels are at their lowest since a long period of time. It is believed that worldwide pollution dropped by 48% lately. Mother Earth seems to be breathing while humans are taking a forced break!
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