The first Data Investment panel which brought together experts from regional countries was, we can safely say, a successful project. The panelists were able to exchange information about the impact of the Covid 19 crisis which hit not only the region, but the planet as a whole. The focal point of the conversation was the real estate sector and the economic measure governments across the region applied to counteract the negative effects of the crisis.
The first few questions which the moderator, Uroš Novković, placed in front of our guests concerned the negative impacts the pandemic had on the economy as a whole and what were the responses of the governments. The overwhelming opinion of the panelists was that the crisis was severe, that the economies are being hit very hard and that the consequences are still unknown. The short term negative impacts are still hidden and that the experts have a difficult time to assess the damages. The mid-term and long term damages are a mystery, since we do not have a reliable prognosis on how long or how serious the pandemic will be. Also, a part of the panel was reserved for type of measures governments enacted on everyday life, like social distancing, curfew, usage of protective gear and so on, and how they differ from country to country, since there is no unified response.
Whether the steps taken to fight the crisis will be effective or not, we will have to wait to see. Srđan Runjevac from Erste Bank Serbia pointed out that even though the banking sector acted promptly and took action to protect the employees and customers, the whole system will have to rely on the measures the government will introduce. The overwhelming opinion of the speakers is that the economic programs introduces by Slovenia, Croatia, Montenegro, Serbia and Bosnia and Herzegovina are basically very similar and that they are necessary to support the businesses. Also, Maja Ostanek from Slovenia noticed that the financial sectors are stable and that, so far, the unemployment rate is not growing uncontrollably. The key goal, something that which all speakers agree, is to secure jobs and to slowly motivate consumption.
Filip Vučagić from Colliers Croatia emphasised how this is not a mere crisis of liquidity and that the problem might be much deeper, probably structural. Therefore, we might expect even more serious reactions from the government. Maho Taso from Prostor RE Services from Sarajevo expressed a similar opinion and pointed out that the RE sector is practically frozen, due to the prohibitions of movement, lack of social contact and institutional lock down.
Second part of the panel was reserved for questions concerning the real estate sectors which will be hit the hardest, but also the ones which might even benefit from the crisis. As Milovan Novakovic of Colliers Montenegro shared, the hospitality sector, the hotel and tourist services industry will take the biggest burden of the crisis. Hotels are practically closed or working on „idle“, so it will be difficult to return to the levels of demand before the crisis. The speakers generally agreed on the fact that the retail sector will also experience a downturn, since the lack of consumption will consequently lead to seriously lowered incomes which will, in turn, influence the landlord-tenant contractual relationship. Residential sector is still unaffected, but this does not mean it will be unharmed if the crisis endures. Still, it is the least affected so far. Finally, one sector that might enjoy growth is the logistics sector, on which all our speakers agree. The fall of retail might be the rise of logistic, fueled also by the growth of e-commerce.
Hopefully, the end of crisis might be nearer than we believe. After hearing grim projections about the negative impacts from all over the world, the general outlook was that we will be experiencing a crisis on a greater scale than 1929 or 2008, but it might not be the case. Nevertheless, it is very early to have a clear answer about what is in store for the RE sector and the economy in general.