Possible impacts of COVID-19 outbreak on real estate sector and possible changes to adopt: A situation analysis and general assessment on Turkish perspective

Abstract

In this study, the possible effects and impacts of the COVID-19 outbreak on real estate development and management processes were examined by making an evaluation and an insight on administrative and media records. Crises and global effects of pandemics were described as an unforeseen event which have negatively affect project development in the real estate sector, sales operations of existing real estate, costs estimates, values and rates of return of existing real estate sector in general. The inception of new policy and precaution measures, especially travel bans and restrictions on domestic and foreign tourists impacts the tourism sector and causes its revenue to decrease, the narrowing of the volume of transactions in real estate such as retail facilities, office and residence transactions, increased vacancy rate in hotels, the additional measures taken due to the pandemic causes the significant increase in operating costs, decrease of rent collection creates losses due to declining in demand, net operating income and investment value also tends to decline. Change in business orientations, working and living conditions necessitates a review of planning, project development, marketing strategies, use and management processes of settlements. This study has It is observed that Turkish the government wants to revive the real estate markets only with the increase of sales of existing residences and businesses and tourism-oriented measures (such as a hygiene certificate), but it is clear that the measures taken for radical change in the long run are still inadequate. It should be emphasized that there is not yet enough work done to estimate how long the impact will continue and what is its financial burden will be in the years after March 2020, when the first case of the outbreak has been reported.