PROPERTY AFTER CORONA ●
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NEWSEC PROPERTY OUTLOOK • AUTUMN 2020
PROPERTY AFTER CORONA Klas Eklund, Senior Economist, Mannheimer Swartling
Gradually, we seem to be moving out of the most acute phase of the crisis, after the most brutal downturn in modern history. But it will take time before we can declare victory. Unemployment remains high, productivity is hurt by trade wars – and of course, the virus may come back in new waves. Amazingly, property markets have held up well during the pandemic – spurred by record-low interest rates. Economically, the Nordics have fared better than most European countries, but the Swedish death toll during spring was frightening. A gradual recovery In February, when I penned the macro piece for the spring edition of the Newsec Property Outlook, I stated: “Chinese growth H1 2020 will take a hit… Several nejghbor countries will also suffer, but direct effects on Europe and the US will be small”. How wrong I was! Economically, the second quarter of 2020 turned out to be the worst ever in peace time in the Western world. While China was the first to start climbing out of the abyss,
GDP in the US and most European countries fell by more than 10 per cent. In some countries in Southern Europe about one third of all economic activity was closed down for more than a month. If we add Q1 and Q2 and look at all of the first half of the year, the decline in Spain was 24 per cent and in the UK 23 per cent. The Nordic countries did better, with e.g. Finland down only 5 per cent. A number of observations indicate that Q3 will showcase an improve-
ment just about everywhere. China is already up and running, and global supply chains were not interrupted as severely and for as long as we feared in the spring. The USA is also rebounding, and the number of temporary layoffs has started to fall. In Europe, too, most countries show improving economic numbers. Sentiment indicators are up – albeit a bit wobbly. In July, as the rebound picked up speed, there was a general feeling that the recovery could be
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