- Olivia Eriksen
How Covid-19 affected El Salvador property development
The effects of the pandemic on the sector.
The impact of the Covid-19 pandemic has been felt all around the world in varying measures. Some countries escaped with only a handful of cases and with little to no lockdown measures, whereas others felt the full force of economic turmoil, social restrictions, and more.
El Salvador is one country that was hit hard by the virus, with the impacts being felt across all professional sectors. This article looks at how the El Salvador property development sector was affected by Covid-19.
Days after El Salvador’s first confirmed case of Covid-19, President Nayib Bukele introduced strict lockdown measures in an attempt to halt further transmission of the virus. Schools, shops (with the exception of essential stores, such as supermarkets), and public transport were closed immediately and the country’s residents were asked to stay home at all times unless entirely unavoidable. The government deployed the army to monitor checkpoints, and to enforce penalties to anyone found to be breaking the lockdown rules without just cause.
These measures were implemented with full force for nearly three months, and it was the middle of June before the country saw any glimmer of normalcy again. It wasn’t until August that this glimmer became brighter, and Salvadorians could go about their – albeit slightly altered – daily lives again.
This strict lockdown meant that the economy was hit hard. With little to no way of sustaining cash flow throughout a significant portion of 2020, businesses were forced to fold all over the country. In turn, this reduced demand for property development, and had a huge impact on the sector.
INTERNATIONAL TRAVEL RESTRICTIONS
In March of 2020, El Salvador closed its borders to all international travellers. This meant that all foreign custom was ripped away from El Salvador businesses, at the same time as local custom being greatly reduced due to the lockdown.
The lack of international travel impacted property development significantly, as there was a sharp decline in the number of businesses outsourcing their work to El Salvador – if they couldn’t enter the country, there was little point in basing their business there. When this was coupled with the loss of local tenants, buildings were increasingly being left empty.
Despite El Salvador country being so quick to adopt containment measures, the pandemic still had a major negative impact on peoples’ incomes. Unfortunately, it’s thought that Covid-19 could cause the poverty rate to fall to levels not seen in years.
With the strict lockdowns forcing Salvadorians to be house-bound for months on end, countless residents will have been left unable to make a living due to not being able to carry out their work at home. In turn, businesses have suffered due to staff being confined to their homes, and due to a loss of custom.
The property development sector is one that’s felt the impact of these affected incomes on all fronts. Staff have been laid off, projects have been halted indefinitely and without warning, and companies have seen clients drop off at alarming rates.
Now, nearly two years on from the first case in El Salvador, the country is slowly but surely recovering from the pandemic’s effects.
International travel has resumed, there don’t seem to be any further lockdowns on the horizon, and the economy appears to be stabilising – in part thanks to the influx of money from tourism restarting – but some challenges do still persist. It’s going to be a long journey back to full health for the country.
One thing that is for sure is that as the country rebuilds itself, the property development sector can be on hand to help in the efforts from the ground up, literally.
Unfortunately, the effects of Covid-19 upon each individual country were largely out of the hands of its residents, and El Salvador was no exception. However, what happens moving forward is something that can be controlled by the public. Rebuilding economies and societies will take work from everyone, but it is achievable. The El Salvador property development sector will be rebuilt, we’re sure, and it might even turn out to be stronger than ever.
If you’d like to discuss our property development opportunities, we’d love to hear from you! Follow this link to start a conversation today.
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