The Coronavirus situation in Spain has become extremely serious with one of the fastest rising contagion rates in the world, prompting the Government to decreed a countrywide lockdown lasting 15 days. This is the beginning of a shock that I expect will paralyse the Spanish housing market, in particular the second home market, for at least the next three months.

According to an article in the New York Times this weekend, Spain has become the latest epicentre of Coronavirus after a faltering response.

A particular blunder by the Spanish government was allowing massive rallies like the International Women’s Day rally in Madrid last Sunday, March 8, at a time when the Coronavirus was raging in Italy, and there were already 589 confirmed cases in Spain. Partly as a result, contagions in Madrid exploded.

So the government has declared a ‘State of Alarm’ (or State of Alert, depending on translation) lasting fifteen days until 30th March if no longer, with people expected to stay at home and self-isolate as the whole country gets put in a cordon sanitaire. All tourism and leisure businesses will close. This is going to hammer the Spanish economy, which relies heavily on tourism and services.

This is all terrible news for the Spanish housing market, especially the second-home market, which relies so heavily on tourism. Sales activity will be paralysed for three months at least, possibly longer. It looks like 2020 could be a write off.

This Coronavirus shock to the market will probably create an opportunity for buyers when the dust settles, but it’s obviously bad news for sellers.