Why invest in real estate?

According to the latest bulletin of the Housing and Land Observatory, during the first quarter of 2020 there was a notable reduction in transactions in the real estate sector. Due to the COVID-19 pandemic, uncertainties remain with the economic reactivation of this sector; although the resilience of real estate investment is already in sight.

This scenario could make you think that investing in property is not as beneficial as in the past. However, here are some reasons for you to invest safely in the real estate market, without fear of losing.

 

Stable investment

Although the real estate market has been affected by the global economic crisis after COVID, it is still more profitable than other investment methods. Trading, very popular today, the stock market and even cryptocurrencies are an option that can generate high profits, but the risks are just as high. Instead, investing in real estate wisely can be highly profitable with few complications.

 

Safe savings

Money in bank accounts is prone to the consequences of inflation; therefore, it is no longer beneficial to keep savings in storage. Economics experts say that the best way to save is by investing in profitable businesses.

A sure way to save is to invest in a new work of which later it will be able to see the increase of its value in the market. Yes, one of the greatest advantages of this kind of sector is the capital gain of the property and its increase over time. Therefore, the amount you invest can double or more, in a few years if you decide to acquire real estate.

 

 

Additional income

Since the long-term value of a real estate purchase can be increased, it will always be a good investment. However, one of the most notable aspects is the possibility of generating extra income through the rental of the properties. Therefore, monetizing this investment is easy, comfortable, and with few risks.

For the second quarter of this year, the profitability of renting a home has increased. Before the health crisis, it was at a rate of 7.5%, currently standing at 8.2%. For this reason, investing in real estate is one of the most attractive options when retirement approaches, as it provides financial freedom and in the future, heritage to inherit to descendants.

 

The pandemic, just as it has accelerated trends such as e-commerce, has also served to mark greater distances between new and used homes. Why? The demand values today more than ever the qualities of the new construction: location on the outskirts of cities, outdoor spaces -terraces or gardens-, rooms for teleworking, larger surfaces, energy-efficient systems …

Some questions that we answer here;

 

What will happen to prices?

When the Covid-19 crisis broke out, some took the opportunity to proclaim themselves fortune-tellers of the future of the real estate sector. Without ever having experienced a global pandemic and without counting on comparables, they predicted the collapse of the housing market.

For now, the bad omens have not been fulfilled. And I would like to emphasize “for now”, because we still do not know what the outcome of Covid-19 will be like. What we do know is the short-term effects of the pandemic in the form of the first real estate statistics. And the main conclusion is clear: the new construction housing is coming out strengthened.

At this point, it is best to talk about realities. According to the INE, the price of new housing rose by 4.2% year-on-year in the second quarter and used housing registered a 1.7% rise. And according to the Ministry of Public Works, new construction became more expensive by 0.6%, while second-hand work fell 1.7%.

How do you foresee the next few years in the real estate sector?

Honestly, no one can know what will happen in the future, neither in the short, nor in the medium, nor in the long term. We are in a situation of great uncertainty because the evolution of the pandemic is unpredictable. The real estate statistics show that new-build housing is holding up well and faces the last months of the year with fully normalized activity and a good rate of sales, which allows us to glimpse a positive trend.

Finally, what will happen to the real estate sector in the province of Alicante?

The pandemic occurred at a time when the housing development industry was prepared to face even a crisis like this. Before Covid-19, it grew on very solid foundations, on strong demand and, mainly, on solvent companies with little leverage, with a more than proven financial discipline and with an important sales portfolio. In this way, the real estate sector will be an economic locomotive in Alicante, as in all of Spain.