The 4 assets of real estate to resist Covid-19

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The health crisis continues to weaken sectors such as clothing, events and tourism. What about real estate? While the market has been impacted by containment, it is showing strong resilience due to its specific characteristics.

Housing, an essential need

It was already before Covid-19 made its appearance, it still is and will remain so for a long time to come: housing is a timeless need, essential for everyone. It is besides the first item of household expenditure with an average budget of € 631 per month according to an OpinionWay survey for Sofinco, excluding charges or loan repayment. This means that supply and demand are not exclusively correlated with the health or economic situation, because other events punctuate the moves and acquisitions: first job, first CDI, promotion or professional mobility, arrival of a child, marriage or separation, etc.

Stone, a tangible good

The eternal debate between financial investment and real estate investment has experienced a new episode with the outbreak of the health crisis. On the one hand, the stock markets have loosened with the approach of containment, on the other hand real estate has faced without falling prices in the old (+ 5.2% over one year at the end of August according to the LPI / SeLoger barometer). Of course, this development is largely due to the scarcity of supply. This is why the stone is considered a safe investment.

Mortgage loans remain attractive

A sharp rise in rates was feared, but mortgage lending held up. The average rate stood at 1.25% at the end of July according to the Housing Credit Observatory / CSA. this is more than at the end of 2019 when this indicator had fallen to 1.11%, but it is as much as in June 2019. If the lending institutions have tightened the screw around the debt ratio (33% maximum) and the loan period (strongly discouraged beyond 25 years), the low level of mortgage rates remains a favorable factor for the current market.

Nothing justifies waiting

It is not possible to exactly predict the future of real estate. Standard & Poor’s very quickly predicted a decline in prices in 2020 (-1.4%) and 2021 (-0.5%) before an upturn from 2022 (+ 2.5%). In fact, and even if it is already palpable in Paris (-0.4%), Montpellier (-0.5%) and Toulouse (-0.5%), according to Meilleur Agents, the drop remains minimal compared to the frantic rise in prices observed since 2015. In conclusion, no need to wait. Sellers can still sell their property because we are far from a price collapse and buyers can jump right in as prices are only expected to drop 1% by September 2021, according to Best Agents estimates. .

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