Follow speculation and find out if it’s worth buying property in 2020
The year 2020 kicked in! Changes in the Salic rate leaving interest rates with the lowest values in the last decade. New trends in real estate and launches in full swing. Buying a property in 2020 was the first goal of many, with such positive scenarios.
However, a huge pandemic that paralyzed the world economy. Okay, not what anyone expected? But, it’s there, and now, it’s time to go back to those plans that were shelved and look for solutions to acquire your property following the word of the moment: adaptation!
It’s not because the booths are closed that buying a property in 2021 is something far away.
Real estate companies are already investing in technology for digital tours of real estate. And harvesting opportunities with professional photos and well-explained floor plans might be another option.
In this moment of confusion for the buyer and investor, quality content can open new paths. The main topic for real estate in 2020 is about the triple shares of the real estate market. Which are: buy, sell or rent.
We’ll bring you some recent reviews and tips from financial experts, all so you can identify:
-? What is the best decision at this time of pandemic -? What to do with the assets and real estate I already own -? If it’s worth buying a property in 2020
Focus on History – Real estate funding and growing sector since 2021
Before we talk about buying property in 2020, it’s good to remember what happened before the pandemic. After a long period of crisis, which directly affected the real estate sector, 2019 gave new life to the sector.
Sales, according to the National Real Estate Indicators, rose by 16% in the second quarter of 2019. In addition to increasing 12% compared to the same period of the previous year. The Salic rate had fallen to 5% in November, and interest rates were low on loans.
Real estate funding was in full swing. This is due to a growing optimism among investors regarding the growth of the Gross Domestic Product (GDP). This estimate made that since July 2019, there was a fundraising of BRL 3.8 billion. What made the new offerings of invested shares, generate new investments in residential and commercial projects.
To complete, there was also an increase in the number of property launches throughout Brazil. Mainly in big cities, where launching around green areas were one of the main bets in the sector.
Keeping an Eye on the Pandemic – What are the projections for real estate in 2020 in times of social isolation?
Buying or renting a property always becomes a dilemma. In 2020, this type of question becomes even more important, due to the pandemic that the planet is facing. With this, experts believe that the main answer for buying real estate lies in the calculator.
“In the past, the return on fixed income was higher than the rental rate, around 0.5% of the property’s value […] today, the net income on fixed income is below 0.30% per month. Renting doesn’t pay.” comments Miguel Oliveira, executive director of the National Association of Finance Executives (Amfac), in an interview on the Exam website. You can check out other expert opinions here.
Also, there are two important factors for closing deals amidst the proliferation of COVID-19:
#Down Demand and Falling Price: Most buyers, investors, and real estate clients have stopped looking for real estate. That’s what a poll released exclusively by CNN says until the day of this story. You can find research and other relevant data here.
In it, 3,500 people living in metropolitan regions of the country were interviewed. And more than 86% of them will postpone any decision to buy or rent a property. The reasons are the most varied. Also, 54% of industry professionals saw an increase in cancellations of deals during the quarantine period.
What does that mean? Basically, we have a lot of real estate available. However, with a huge number of customers who do not want to take chances. This means that:
Throughout this pandemic, real estate prices will be readjusted so that business can be encouraged, and that is where the great opportunity comes in.
#Cash-based investments: With lower prices, too, it will be possible to do good deals in 2020. Much better terms are being offered by some of the biggest banks in the country. Everything in the quarantine period, which you can check here.
Those who have cash available can make the purchase without compromising the liquidity of their investment portfolio. The explanation given by Ricardo Rocha, finance professor at Inspire, in an interview with Exam, is simple. With prices low today, and thinking about the long term, it’s possible to buy properties today and resell them when the economy recovers.
“In three years, with the future recovery of the economy, he will be able to resell the property at the market price and obtain a return that fixed income would never have given him in the period”, says Ricardo Rocha.
So how is the market in the middle of the pandemic?
A number of factors will be responsible for dictating what will happen in the real estate market in this uncertain time. According to data provided by Info money, there is no guarantee that interest rates on financing will fall more than current levels.
This is because banks will be cautious, as many people may have unstable income, which would increase defaults. However, interest rates are already the lowest in history today, which still makes them favorable.
Real estate rents at this time tend to fall, thanks to possible variations in tenant income. Which can lead to less income for the property owner. Thus, more dynamic and less rigid prices will have to be made for that time, which may not be an advantage.
As a result, depending on how long the quarantine and social isolation situation last, many owners may be more open to negotiations. Since their properties no longer have a satisfactory income. Thus, this opens up new opportunities for those with a bullet in the needle to buy real estate in 2020.
Also, depending on the length of the quarantine, isolation, and pandemic, property prices can drop sharply. Which brings again excellent opportunities for those who know how to look.