Home Knowledge base Sector-specific information COVID-19: Global Real Estate Implications

https://www.jll.co.uk/en/trends-and-insights/research/covid-19-global-real-estate-implications

Real estate policy

Countries around the world have implemented changes to real estate policy in order to lessen the burden on tenants and in some cases landlords:

  • In the U.S., many decisions are made at the state and local level, and at least 34 states have temporarily prohibited evictions. At the same time, the federal government issued a 120-day moratorium on evictions from federally subsidized housing or from a property with a federally backed mortgage loan. Major mortgage lenders, including Citigroup and JPMorgan Chase, suspended mortgage payments. Some U.S. states have halted construction on all projects unless essential, such as medical facilities.
  • In Europe, several countries, including the U.K., Germany and France, have suspended evictions. A number, like the U.K. and Italy, are providing temporary mortgage relief. In various locations across Europe, commercial and residential tenants have been offered mortgage and rent holidays. Some countries, such as France and Italy, have suspended construction. Banks in Europe are being strongly encouraged to give forbearance and not to foreclose on late payments, while governments have granted retailers tax relief.
  • In parts of Asia, some landlords have offered temporary rental rebates and rent discounts. Meanwhile, some countries, like Singapore, are considering legislation that would protect commercial tenants who cannot pay rent for a period of six months.

Policy response summary for 10 largest economies

Country

Pandemic Response

Fiscal Response

Monetary Response

Brazil Land borders closed. State of emergency declared through Dec 31, 2020. R$500 billion (7% of GDP) including unemployment benefits and direct payments to individuals. Direct vouchers for those in informal labor market. 50 bps rate cut. R$637 bn for bank lending. Foreign exchange intervention for liquidity and volatility.
Canada Closed borders to non-residents. Mutual decision to close US-Canada border to non-essential travel. Only four Canadian airports to stay open for international flights. Schools, museums and cinemas closed with additional containment measures at the province level. Spending of 3% of GDP, including funding for firms and households, eased eligibility for sick pay, and deferred taxes. Up to 75% wage subsidy for qualifying businesses for up to 3 months to help prevent layoffs. Policy rate cut to near 0.25%. Purchase of Canadian government securities in secondary market at rate of at least C$5 billion per week.
China Lockdown of nearly 60 million people across Hubei. Suspended entry of foreigners. Restrictions on movement between Chinese provinces. Fiscal policy to spur investment of up to 6% of GDP. Funded via CGB (¥2-3 tn) and local government bonds (¥4 tn). 50% interest subsidy to firms impacted by outbreak. Creation of ¥109 bn ‘Epidemic Prevention Fund’. Multiple central bank rate cuts. ¥800 bn refinancing provided to banks to lend to large corporations. ¥350 bn special credit quotas to private and small firms.
France Closure of all non-essential stores and restaurants. Full lockdown, except for necessities. €45 bn (1.9% of GDP) funding package, including €8.5 bn for two months of payments to workers. €300 bn of guarantees for bank loans to businesses. ECB providing €1.2 tn of additional liquidity. €750 bn (6.5% of GDP) ‘Pandemic Emergency Purchase Program’ bond purchase program. €120 bn asset purchases ‘envelope’ to be deployed flexibly.
Germany Borders closed with Austria, Denmark, France, Luxembourg and Switzerland. Banned public gatherings of three or more people. Schools and daycare centers closed. Nationwide closure of non-essential retail activities. €750 bn, including €156 bn supplementary budget and €600 bn via Economic Stabilization Fund (ESF) – includes €100 bn credit for additional loan guarantees. €156 bn supplementary budget. ESF: €400 bn loan guarantees, €100 bn credit to development bank, €100 bn for direct equity investments in German companies. ECB providing €1.2 tn of additional liquidity. €750 bn (6.5% of GDP) ‘Pandemic Emergency Purchase Program’ bond purchase program. €120 bn asset purchases ‘envelope’ to be deployed flexibly.
India Travel bans and mandatory quarantines for incoming passengers.
All domestic flights stopped. Country-wide lockdown.
US$22.6 bn stimulus package with food aid and direct cash transfers to low-income households. Medical insurance for front-line health workers. US$4 bn in foreign exchange swaps announced. US$13.5 bn in long-term repo operations at benchmark policy repo rate. Policy rate cuts. US$50 bn liquidity injection.
Italy Nationwide lockdown. €25 bn (1.5% of GDP) fiscal stimulus includes: healthcare system and civil protection department (€3.2 bn), employment (€10.3 bn), liquidity for businesses and households (€5.1 bn), local governments (€4.5 bn), tax payments and incentives (€1.6 bn). ECB providing €1.2 tn of additional liquidity. €750 bn (6.5% of GDP) ‘Pandemic Emergency Purchase Program’ bond purchase program. €120 bn asset purchases ‘envelope’ to be deployed flexibly.
Japan Banned entry of travelers with Chinese passports from Hubei or Zhejiang provinces, and of foreign travelers who have visited certain Chinese regions, South Korea, Iran or Italy within the last 14 days. Two aid packages totaling ¥108 tn in total – equivalent to 20% of GDP, including assistance for medical professionals and those affected by school closures, as well as loan support. Provision of liquidity through commercial paper and corporate bond purchases. Low-cost lending facility set up for corporates impacted by virus. ¥500 bn for bond purchases followed by additional ¥200 bn bond purchase program.
U.K. Nationwide lockdown. Nationals advised against all international travel for an indefinite period. Support to businesses via emergency loans (£300 bn), tax cuts and grants (£20 bn). £7 bn emergency spending to support households, businesses, and local governments. Policy rate cut and expansion of quantitative easing program by £200 bn. Provision of credit to businesses, particularly small and medium-sized firms (approx. £100 bn).
U.S. No national lockdown but majority of the US population is currently ‘shelter in place’ by state mandate. Banning of non-US citizens or residents who have been to China, Iran and some EU countries in the previous 14 days. Borders closed with Canada and Mexico. US$2.8 tn package (circa 10% of GDP). Supports households, businesses and governments. Includes US$850 billion in loans, US$838 bn in fiscal stabilizers, US$652 bn in tax deferments, US$480 bn in direct spending. Fed implementation of ‘whatever it takes’ approach via cutting interest rates to zero, unlimited asset purchases (quantitative easing), and providing liquidity of roughly US$500 bn in total.

Source: JLL Research, April 2020

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