Real estate investment as a safe haven due to increased inflation

The increase in inflation, the reduction in new construction, a lower supply of second-hand housing and the significant drop in interest rates are bringing investors back to the real estate sector, which is once again seen as a safe haven to protect capital.

The report “The post-Covid-19 real estate market. ?Profitable investment or new bubble?” carried out by the business school EAE concludes that the price evolution of new construction housing has been significantly higher than that observed in second-hand homes and also higher than the general average. After the reduction of the health alarm caused by the coronavirus, there was a large gap between new construction housing and second-hand housing, with growth levels of 7.5% and 8.2% respectively.

Although the price levels observed during the housing bubble have not yet been recovered, it is possible to observe some recovery, especially in new housing, since the index for the second quarter of 2021 is 141.1, while in the same period in 2007 it was 132.5. This is 10 points above historical data. On the other hand, in second-hand housing there is still a difference of 40 points, since the value of the IPV in the third quarter of 2007 was 169.3, while in the same period in 2021 it was 129.5.

We must also bear in mind that areas affect the rise in prices per m2 of free housing, for example:

• Community of Madrid with 2,598.6€.
• Basque Country with 2,428.7€.
• Balearic Islands with 2,363.4€.
• Catalonia with 2,016€.

Conversely, the regions with the lowest price per m2 are Castilla La Mancha, La Rioja, Murcia, Castilla y León and Extremadura.

New home buying and selling transactions have increased at a greater scale and speed than second-hand homes, increasing by more than 40% during the first quarter of 2021 compared to the previous period. This growth shows solid growth in the real estate market, which has not been slowed down by the pandemic or the recession of the Spanish economy. The purchase and sale of real estate has grown at a good pace, even reaching pre-pandemic levels, and even surpassing the 2019 peak in June 2021. Regarding the type of housing, we should undoubtedly highlight the purchase and sale of properties, which has increased by 82.5% compared to June 2020, which sets an annual cumulative increase of 39.3%.

What do you think are the regions with the highest number of purchases? Let's look at it...

There are 4 regions that managed to account for 64.3% of all operations between January and July 2021:

• Andalusia is in the lead with 76,422 homes (20%), which represents its great growth, which is precisely why at Reental we offer our investors a tokenized property in the fastest growing city, Malaga.
• Catalonia is in second place with 60,807 homes (15.9%)
• The Valencian Community would be in third position with 55,488 homes (14.5), undoubtedly a region with great growth and the establishment of innovative companies in the most Silicon Valley style, especially in the La Marina part of Valencia, where Reental offers the opportunity to invest in the largest property to date, The Marina Building.
• And finally we would find the Community of Madrid with 53,480 homes (14%).

Let's now talk about the rental price and its evolution.

After the real estate crisis in Spain, the average rental price was around 7.5 €/m2, a price that peaked with a total of 11.1 €/m2, which corrected in 2021 to be below this price at a price of 10.7 €/m2.

In addition, the return on rental property (revaluation and rental income) increased by 7% during the second quarter of 2021, suggesting the great potential of this type of investment, especially when investment in tokenized properties, such as Reental, is facilitated and democratized.

What do you think has been the most popular housing model?

Without a doubt, when we think of the average Spanish home, we imagine an apartment with 3 bedrooms or 2 bedrooms, and in fact we are not on the wrong track because this type of housing accounts for 49.6% of the total in all of Spain, a barbarity.

However, we must also bear in mind that a shock as big as the pandemic changed us all, including of course our vision of housing, since housing began to be demanded with greater comfort, benefits, sustainability and large spaces. This paradigm shift triggered the purchase and sale of single-family homes during the first months of 2021 compared to previous years.

Finally, as we have been able to verify in this article, in times of uncertainty, the real estate market is a safe haven to protect and make a return on each person's capital, but until very recently the real estate investment was available to a few, now thanks to the Reental real estate tokenization this type of investment is available to anyone. If you haven't yet taken the step to invest in real estate with Reental, do not hesitate to contact us so that we can answer all your questions and help you take the step to protect your capital.

In order not to miss any of the opportunities we present, we recommend that you join our group of Telegram To get to know others Reentels and the whole team. Of course, we invite you to take a look at our blog articles to keep you informed.

Welcome to the new way of doing finance, welcome to Reental.