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Why Now is the Best Time to Invest in Real Estate

Due to the global crisis of COVID-19, investors have to adapt to a world with fewer certainties. Nevertheless, every crisis provides those prepared to be more adventurous with plenty of opportunities.

On the back of low interest rates and a more volatile stock market in recent years, Real Estate – with its stable returns and value increase – has become a very popular investment class and immerged to provide some protection from the uncertain economic outlook.

During these uncertain times, when we are unable to predict the future, Real Estate has once again emerged as the safest investment option.Below, we present 5 reasons why today is the best time to invest in Real Estate

1.Resilience of the Real Estate Market

One of the reasons we prefer investing in real estate versus in other assets is its resilience. Although the stock market has performed well during the recent years, it is volatile and unpredictable and people do not want to invest their money in such risky instruments.  On the other hand, Real estate market has a history of performing relatively well after economic shocks as is inherently slower moving than public equity and bond markets.

On top of everything, real estate is not paper money, this is the asset you can hold tangibly which further enhances its reliability and return on investment.

2.Interest Rates are Incredibly Low

The extremely low interest rates that are in place today can be considered as a great opportunity to save a lot of money when investing in Real Estate. The low mortgage rates provide Real Estate investors with the option to borrow money at a very low cost and increase their buying power.

In general, at such low interest rates, buying a property is a very attractive decision for potential home-buyers as they could take advantage of the current low rates to buy a lifelong property at an extremely low finance cost.

In addition, low interest rates decrease amortisation period of the mortgage and generally they are a great incentive for prospective buyers to enter the market.

 3.Subsidy of Interest Rates

In an effort to support the economic recovery of the country, Cyprus government announced among other measures, the subsidy of interest rate for new mortgages that will be granted until the end of 2020. The scheme covers loans with a value of up to €300,000 and will cover up to 1.5% of the interest rate for a period of four years. Nevertheless, this incentive can be used only for owner occupancy.

This supporting measure makes home ownership an even more attractive option as decreases substantially the interest rate and gives to borrowers the ability to finance their homes with almost zero cost for four years.

 4.Under-Priced Opportunities

The lockdown measures, the travel restrictions and the general economic uncertainty has led to a slowdown in 2020 and the current market conditions could cause some home prices to drop during the short-term period. Landlords are decreasing property prices in order to boost the market recovery while some buyers have decided to wait until the situation improves. These price drops could create great opportunities for those who remain financially secured and intend to invest in Real Estate sector.

5.You Can Take Advantage of the Real Estate Market Cycles

The Real Estate Market is cyclical, and each phase of the cycle follows predictable patterns so that the recession of the last cycle leads to the recovery period of the next cycle. Successful Real Estate investors monitor these cycles to identify investment opportunities.

The market cycles are based on economics and consumer behaviour and investors can learn how the cycles change and how to get prepare for them. Nevertheless, is impossible to predict how long each phase of the cycle will last.

In any case, buying an investment property during the COVID-19 crisis may be a great decision as this is a very good period to find properties that you can sell for a higher price in the next Real Estate Market cycle. It is likely that sellers will discount the price of their properties during this period to conclude a sale, while buyers will take advantage of this to nab a bargain.

So is Now a Good Time to Buy a Property?

With property prices and competition falling away, the short answer is yes — if you’re one of the lucky ones who remains financially secure.  All has to do with the overall health of the economy and consumer’s behavior. As long as consumers feel confident about their jobs and income, they will continue to spend—and that includes investing in real estate. As we mentioned above, Real Estate is cyclical and history shown that it is exactly these conditions that present the best opportunities. That means now is the time to get prepared to take advantage of the opportunities that the market will offer.

LionGlobal – Your Trusted Real Estate Partner

Supporting the real estate investment industry is one of the core elements of our business. Acknowledged as a leading partner within the real estate industry, our expertise covers work multiple jurisdictions.

Our Real Estate Investment services include market analysis, identify and introduce opportunities, feasibility studies, planning advice, real estate due diligence, business representative services, etc.

Check here our full service offering.

 

 

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