Real Estate: Yannick Callens gives sound advice as to when to make your move.
The world is not going well in 2020. It is increasingly dictated by new rules that will take some getting used to. And the most important point has just been mentioned: our habits. For the real estate world it is the same, we will have to get used to the changes, to the new rules and, therefore, to the new industry.
Supply and demand will remain the basis of the sector, as the two variables that we already know of are the quality and quantity of goods on the real estate market. Currently, the supply remains stable, but the purchase demand is increasing sharply. People want to invest in something tangible, given the circumstances. Anything good, put on the market at the right price, leaves during the day. Very quickly!
The new real estate market is a little more difficult because the prices per m2 are at their highest. I would say you can compare it to a diesel engine. Slower at the start, but then it’s gone! I’m sure the new home market will pick up, it’s only a question of taking the time to get used to it. The big difference remains that on the cost of construction there is VAT to be paid, which is still as high as 21%.
Regarding the offer, there is currently little on the market because after lockdown the market worked very strongly and very quickly. Visits to apartments and houses have exploded. Real estate agents and Notaries can no longer keep up. The summer holidays regulate this, the months of July and August are calmer, but I have already heard from the people concerned telling me that from September it will start again.
Lending rates are also at their lowest. We are below 1% for a 20-year fixed rate. Never seen before! And I wouldn’t be surprised if it becomes the benchmark… the habit. My advice as a real estate investor is to get used to changes as quickly as possible, and I pluralize ‘changes’ because a lot of things are changing at the same time.
To develop a good habit, a person has to work on it for at least 21 days and, if he or she has maintained this habit for 90 days, it can then be fully incorporated into the person’s lifestyle.
How do you get used to a new habit quickly? The first is to identify it. Know where the change is and how it is now. Not in the past or in the future, but now. The second is to accept it and let go, this is the most important step in any transformation. As soon as you accept the change, it will be easier to move forward.
The same goes for the real estate world. As soon as you are ready for the changes, you will find it easier to get a good deal in real estate. Focus yourself as much as possible on the purchase price. I always tell my students that a good deal in real estate is made before the purchase, not after the purchase. As for the rates, they are low, so one less point to consider.
If you want to get a good deal in real estate, I advise you to wait a bit, especially if you want to make an investment and rent it out. I have read several articles and studies in real estate and all of them conclude that everything is selling now.
I have been to Spain and I can inform you that a lot is at a standstill, and this is just the beginning. We will be amazed at the consequences to come and the good deals. In my opinion, it will last two years before it returns to normal, so that’s two years to see the opportunities arrive.
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