Invest in housing: Does the coronavirus strengthen brick as a refuge value?

11/05/2020
Invest in housing: Does the coronavirus strengthen brick as a refuge value?

The coronavirus crisis has led to a collapse in markets where there are no precedents for the speed of bone declines. Equity accumulated losses close to 40% in Europe, fixed income plunged even further into negative returns, while other alternative assets were completely stagnant. Faced with this dilemma, the question arises again as to whether the COVID-19 pandemic is attracting investment in the brick. Is the average rental return at 7% in 2019, according to Solvia IV Market View. Also, in the first quarter of the year, this percentage stood at 5.78% according to real estate portals. On the other hand, rental housing in Spain had an average income of 1,002 euros in March 2020, which was a quarterly rise of 3.70%. A really interesting starting point, especially in the big Spanish cities not located on the coast.

The crisis will strengthen the tile sector because of the importance it can have in economic activity and because it will create a turning point in relations with the administration. Is it enough to think that a great crisis will come and that it is therefore preferable to be distanced from the investment in brick? According to Juan Antonio Gómez-Pintado, President of Asprima and APCEspaña, this does not have to be the case: "I believe that the sector will emerge stronger from this situation for various reasons," he said. "The first, because of the importance it had for the national economy, as we are already a very important part of the whole activity," he describes. The recovery that will take shape at the economic level, especially due to the possibility of job creation, will be much stronger in his opinion.

In some cases, the real estate sector may offer more returns than the stock market, as long as the time horizon is long-term. The brick will gain appeal "In fact, we see a lot of interest in the residential sector, which in the long run will continue to work well in our way of seeing, while looking very well for concrete opportunities," adds the expert. On the other hand, for Anna Gener, CEO of Savills Aguirre Newman Barcelona, ​​goes even further: "The liquidity stocks in the world are looking for where to invest, which have traditionally always tried to diversify risk into fixed income, equity , and a bit of an alternative, I think today they see real estate as a good attraction. "

The real estate sector will gain weight by agreeing to gain stability against fixed and variable income. We need to pay attention to SOCIMI dividends, as they could skyrocket. January says that since fixed income has been at historic lows for some time and the scenario is likely to be quite long, as equities now have a great sense of dispersion and little stability, real estate, compares very good with the rest of the vehicles. “The sector I think will be able to raise more money than we should if investment alternatives were in a more balanced situation,” he argues.

Rental residential parks present a great opportunity to invest. 96% of this market is in the hands of individuals. Professional management is required. Finally, another of the alternatives offered by the brick in terms of investment may have to do with rental residential parks, as January points out: "The international investor is finally investigating whether there is unsatisfied demand and a business opportunity. The reality is that Spain, before this crisis in the residential segment, already had a very clear unsatisfied demand in the main Spanish cities of a large park of rental housing at affordable prices. "
Malaltia per coronavirus (COVID-19)
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