Is there a silver lining to this ash cloud?
The volcanic ash air travel crisis may be over – or at least that's how it looks right now – but it is interesting to see how big an effect it has on the real estate business.
Although Dubai may be looking at northern Europe with an understandably bemused eye, the scale of inconvenience back here has been very great indeed. Almost no industry has been unaffected and there are genuine cases of loss and heartbreak.
Thousands have had their holidays ruined. Taxi drivers who usually work airports are now flooding cities; rides are easy to get but each driver has only a few clients per day; the health professionals who rely on frequent international supplies of everything from dental cleaning fluid to donated organs are running out of what they need.
No one is pretending that the property industry is the major victim of the problems that have hit northern European airports and almost all long-haul travel to and from Europe in the past week. There is universal acceptance that the hundreds of thousands of stranded travellers and disoriented businesses are the real sufferers.
But when I canvassed opinion in the British real estate industry, there were many who explained how the Icelandic eruptions were changing activities – some for the worse and some, oddly, for the better:
- BMI Home Finders, a London and south east England buying agency that specialises in Middle Eastern clients, reported that the flight restrictions had prevented the start of the 'sales season' for Arab purchasers. "Ramadan starts early [August 10] so the 'London season' for Middle Eastern buyers should have started earlier this year – straight after Easter – as the buyers go home for Ramadan," explains BDI's Director, Tracy Kellet.
- Two sets of overseas buyers with a short time scale have also been hit. Greeks (many of who are buying in Paris and Britain to give their wealth some collateral ahead of what is expected to be severe financial measures to be announced by the Athens government) have been frustrated in their bids to buy overseas as many have not been able to travel. Italians, too, have a short period to commit to buy in the likes of Berlin's commercial market and the residential sectors of London and Paris, because they have new tax regimes being introduced imminently – and many want to buy foreign property to minimise tax burden.
- Andrew Giller of The Buying Solution, another buying agency specialising in London and the UK's Home Counties, says he had a Russian client who, because he was stranded in Britain by the flight restrictions, had more time than expected to focus on looking at properties he wanted, and made an offer after four days of viewing. "As international clients usually fit visits into their travelling schedules, this would normally take weeks. However, we've managed to get an offer on a house in a matter of days."
- "We're finding that the ash cloud is actually working in our clients favour as there have been fewer competing buyers able to view property in the past week. I viewed a family house with a client in Islington and the agent stated that a lot of her applicants are stranded abroad following their Easter holidays, so can't view. Vendors who want to act quickly are unlikely to be flexible for those who are stranded," says Jo Eccles of another buying agency, Sourcing Property.
Will the Icelandic ash change anything in the real estate sector for good? Probably not; a few desperate PR officers have tried to suggest that more people will buy properties closer to their principal homes but I suspect memories are short and this will not be a trend that will last for more than a few days – especially as the worst may now be over as most countries have restored at least some long-haul flights.
But the extraordinary reliance of much of Europe's real estate on international business and globe-travelling clients has been underlined heavily in the past week. And to many, it is a salutary lesson that nature, and not just terrorism and international economic upheaval, can still wreak temporary havoc on the property markets.
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