Foreword: a quick update on the situation
On 12 March, 4,636 people had died from coronavirus. On 20 March, more than 10,300 had died, with 245,000 people confirmed with the coronavirus globally.,
Until mid-March, China was the #1 country concerned by COVID-19, and Italy was the #2 most concerned with 1,000 deaths already. However on 19 March, Italy surpassed China in number of coronavirus deaths.
Indeed, the death toll from an outbreak of coronavirus in Italy rose in the last 24 hours by 427 to 3,405. See below the number of deaths per country, as of 20 March:
Although this is the most important, let’s now look at economic consequences, in particular affecting people working in the real estate sector.
$11 trillion wiped out of the stock market
$11 trillion disappeared from the stock markets amid the COVID-19 outbreak. Naturally, many people wonder how the situation will now impact real estate. Every day we read: “Let owners miss mortgage payments, tenants skip rent checks” (The OCR, BBC).
Real estate is affected by COVID-19, but how?
Real Estate Market: we don’t know yet
Real estate is affected, no questions asked. Millions of jobs are at risk in the United States alone (CNN), so real estate will suffer. But we can’t measure how much yet. It’s too early for that.
So, what about the people who work in real estate? What about real estate agents themselves? If people can’t buy properties, if tenants stop paying their rent, how can real estate agents survive this period?
Real Estate Agents: reasons to worry
The CEO of U.S. real estate brokerage Compass (valued at $6.4 billion), Robert Reffkin, asked Congress to address the particular needs of agents and other independent contractors.
“The roughly 2 million real estate agents in the United States make a gross median income of approximately $41,800 a year before taxes, and have seen business severely contract amid shelter-in-place policies and social distancing.
Curbed.com – 19 March
In many countries globally, real estate companies are at risk. Not only because they can’t earn money right now, but also because they have financial obligations (salaries, rent, advertising).
A few hours ago, the Wall Street Journal published an article called: “Coronavirus is Forcing Real-Estate Agents to Adapt. Will They Sink or Swim?”.
Therefore, in the wake of the global pandemic, some property portals (advertising business) try to help real estate agencies. So what is the reaction of property portals to help real estate agents? Here is a collection of the first measures I could find, from several leading property portals.
How property portals around the world are helping real estate agencies during the coronavirus period
Sweden – Hemnet.se allows buyers to visit houses online
Hemnet.se, the leading real estate website in Sweden, launches live streaming for open house viewings.
“We give all brokers access to a tool that allows them to stream their home listings online in real-time on Hemnet, to reach out to a large group of buyers who can safely visit from their homes”
Cecilia Beck-Friis, CEO of Hemnet – 18 March 2020 (see article in Swedish)
UK – RightMove offers agencies to defer paying fees
Cash flow issues may become a challenge for agents, in many real estate markets. Indeed, until sales recover can be completed, real estate agents won’t get paid. As a consequence, RightMove will be offering a cashflow lifeline of up to £500 a month (see conditions).
However, estate agents were asking for much more. Indeed, they wanted a virus payment holiday. Well, the three leading portals rejected this appeal to give the industry a payment holiday to help firms through the Coronavirus crisis.
Turkey – HurriyetEmlak offers 1 month for free
HurriyetEmlak, Turkey’s leading real estate website, offers one month for free to its clients. Announced it on both Linkedin and Facebook, this seems as the boldest measure taken by any property portal so far.
U.S. – How Opendoor and Zillow React
Zillow offers 50% discount to Premier Agents
“In response to the COVID-19 outbreak, Zillow Group is offering its Premier Agents a 50% discount off their next monthly bill, starting March 23” (Geekwire). Impact of this measure on Zillow’s revenues? Between $40 and $50 million.
Note: Zillow Group revenues = $1.3 billion
Opendoor temporarily suspends homebuying
Opendoor, a leading iBuyer in the United States, suspends homebuying. It was announced as a way to preserve the “safety and well-being of our customers, employees and the general public’ (Inman).
However, as analysts say home sales could fall 35% annually this spring (CNBC), this measure may also protect Opendoor from buying homes during a period of uncertainty in regards to house prices. Will Zillow do the same soon, and suspend Zillow Offers?
France – SeLoger Group offers to defer paying fees
SeLoger Group also offers payment facilities to its clients (Linkedin). However, will it be considered enough by the industry? The Average Revenue Per Advertiser of SeLoger was € 765 per month in 2018.
What about other countries?
If you are you a real estate agent in another country, please contact us to tell us what property portals are doing to help estate agents in your country. For example, I couldn’t find any official news for Italy, nor Spain, nor Portugal. How is the online real estate ecosystem reacting to this crisis?
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