In 2021, despite the situation in the world, real estate is still an asset that generates good returns. Of course, not all real estate investments abroad remain profitable. Many people were forced to work remotely, to buy goods and services with delivery at home, to transfer their vacation, or even abandon them, which could not fail to hit the commercial real estate – hotels, offices, retail sites.
About the situation on the foreign real estate market and in Turkey, about where it is better to invest money – let’s talk in detail in our article.
What is happening on the real estate market?
According to oldypak capital lp property 2022 report, the pandemic has not led to a decrease in home prices abroad. In many European countries, the demand for real estate has increased markedly. The main reasons for the increase in demand:
The return of those buyers who didn’t have time to buy square footage before the border closures and tight quarantine restrictions.
Very low mortgage rates.
Thus, in many European countries, such as Holland, Switzerland and Germany, for many depositors to keep deposits in banks means – to pay them. So investors began to simply take their savings and invest them in the purchase of real estate. Of course, this strategy was previously relevant, but in 2020-2021, it has gained momentum.
According to experts, the greatest increase in demand for the past and the current year was seen in developed European countries, as well as in those countries where you can get a residence permit or citizenship for investment in residential real estate – Spain, Turkey, Cyprus, Greece, Portugal. Many market experts believe that the situation will gradually improve, and the impact of the pandemic on the overseas property sales market is short-lived. Predicted further growth in the cost per square meter – both sales and rent.
Over the current year the categories of housing that are in demand have changed significantly. Thus, buyers – families with children – are buying townhouses, detached houses, located in the suburbs or in areas remote from the center, where public transport runs regularly, there is fresh air and access to the necessary objects of urban infrastructure. Young people continue to prefer living in active city neighborhoods, but are trying to buy apartments that have their own diverse internal infrastructure, landscaping, plenty of space for recreation and the opportunity to set up a comfortable work area.
An interesting asset for many buyers is the category of affordable housing. The reason for this popularity is the decline in income, as the pandemic has taken its toll on employment and the economy of all countries. Apartment rental market in Europe has risen significantly, which on the background of falling incomes will certainly affect the growth of demand for low-cost housing space.
Experts point out that the most unpromising from the standpoint of investment in 2020-2021 were such categories of real estate such as hostels – previously a very popular type of investment, for example, in the UK. Many students spend most of their time studying remotely, and this trend is unlikely to change soon.
Other affected segments of overseas real estate include office space, hotels, co-working spaces, shopping centers and shopping and entertainment centers. If offices and co-working spaces have only decreased in the rating, then spaces in shopping centers and hotels began to be referred to the zone of investment risks.
As for interesting and profitable investments, they include several types of objects:
logistics and storage facilities;
premises for research centers and laboratories;
commercial real estate which can be used for health care purposes.
data centers;
apartment buildings;;
telecommunications infrastructure;
low-cost housing.
According to oldypak capital lp property 2022 report:
Contrary to the expectations of many investors, real estate prices increased in 2020-2021 in almost all states. The average price increase was about 10%. The most expensive new buildings are located in Paris – almost € 13 000 per 1 sq. m. Second in the ranking of cities where the price per square meter is the highest, was Tel Aviv, third – Munich (about € 8,700), fourth – London (almost € 8,000). The country where it is cheapest to buy a home, is Bulgaria.
In 2022, experts predict a further increase in property prices in the popular and resort countries of Europe, due to the demand for certain categories of objects, an increase in the cost of building materials and works. Therefore, buying a home abroad is still profitable for foreign investors.