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Real estate investing in times of crisis: 3 reasons to stay optimistic

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Crises shaking up the real estate market

In the recent past, various crises arose that affected developments on the real estate market. Above all, the Corona pandemic ensured that the situation on the international financial markets and in the economy became more tense. This resulted in falling incomes and thus less purchasing power. There are different forecasts as to how real estate prices after Corona will develop. What is certain, however, is that the demand for housing remains high. This means that at the present time it cannot be assumed that real estate prices will fall in the foreseeable future. However, a shift in interest and a stronger focus on rural regions can be observed. This is linked to rising prices for housing in the cities, but also to the trend of working from home, which has been accelerated by the Corona pandemic and no longer focuses so much on proximity to the employer.

Current market developments demonstrate a continuing high demand for real estate

Why it can pay to buy real estate during a crisis

Real estate is considered one of the safest and most stable investments - this is still true today. For this reason, there are several reasons for acquiring real estate property, especially in the current situation.

1 The demand for housing is not weakening

Current market developments show that demand for housing remains at a high level. Despite the real estate crisis, housing prices are still continuing to rise. Demand remains high, especially in the cities, but also increasingly in the suburbs and rural areas. This provides investors with optimal opportunities to make lucrative investments.

2 Prices continue to soar and interest rates are falling

While prices are at a high level, interest rates are falling to one record low after another. If you are considering buying a property and taking out a mortgage to do so, you will benefit from a positive development right now, because low interest rates make real estate ownership affordable, even for buyers who only have a small amount of capital. The favorable financing options continue to make the purchase of residential property attractive.

3 Tangible assets can help to manage inflation risk

The rising inflation rate is causing money to devalue, while at the same time tangible assets are increasing. This creates lucrative prospects for potential property owners. The new property owners receive an effective hedge against the effects of inflation with the purchase of real estate, while investors benefit from an increase in value, especially if they acquire several properties. Although this is also offset by higher expenses due to management and maintenance, this circumstance can be counteracted by higher rental, operating and ancillary costs.

In conclusion

A look at the housing market shows that Real Estate is a solid investment even in times of crisis. Prices remain at a high level, demand is still rising and interest rates are still at a low. Experts believe that real estate prices may show somewhat slower dynamics after Corona, but are not expected to fall. A shift in demand to the outskirts of cities can already be observed, especially among families. This could bring some relief to the housing market, but apartments in the metropolitan areas remain in high demand among singles and young people. So anyone acquiring real estate property now can look forward to good prospects in terms of value development.

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Olaf Grumm
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