The outbreak of COVID-19 and its rapid spread across the globe has taken many by surprise. There is a wealth of information consumed on a daily basis as regards this pandemic and how it has eaten deep in the economy of most nations. A lot of questions are begging for answers and one of the top questions asked by most investors is if this period is a good time to invest and if it is, what can they invest into that will stand the test of time despite the uncertainties playing in the air.
To answer the question, analysts suggest that of all the sectors that are facing volatility in the stock market, real estate is still the major sector that hasn’t experience a major hit of the pandemic and for any investor that has access to liquid cash, now is a good time to invest in property because best deals of property are gotten in time like this where motivated sellers and landlords are skeptical of the market and don’t want to lose their investment to depreciation.
Related: COVID-19: Effects on Global Real Estate Market
Also, the lower interest rate and the potential for a recession, which could lower home prices are major factors investors must consider as this will give them an edge in negotiations. In other words, the present situation will lead to a price fall as the economy struggles to recover from the losses. Real estate has a strong resilience against inflation, unlike equities and bond market which are experiencing a downtrend or fall in price as the case may be.
According to Jennifer Anderson, of Anderson Coastal Group in San Diego explains that “More people are looking to real estate as their next investment, because of the potential for both appreciation and cash flow and also a real, tangible item that can provide more control and protects your net worth while the market goes up and down.”
In addition, Chudi Kalu, the founder of Middlechase property Limited explains that real estate especially multifamily remains resilient to the impact of the pandemic due to its defensive and stable investment characteristics. The only thing that will change is the operation of real estate moving from traditional to online and AI.
Related: Coronavirus (COVID-19) and the Nigerian Real Estate Market
Speaking on what investors should do this time, Udo Okonjo, CEO, Fine & Country West Africa International asserted that “every investor in every asset class knows that real gains are made when the market is sluggish, when the ‘average, and mostly over-cautious investor’ is holding back investment decisions,” She affirms that a wise investor can also buy off from existing investors who acquired property at the early stage of an off-plan project but due to financial constraint (which some of them are already passing through), may recline.
Conclusively, even though the economy and its sectors are facing a lot of uncertainties, real estate is known to be the safest and most reliable tool for wealth storage. As an investor, your real estate investment can not go wrong because it’s a basic necessity to livelihood.
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