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What happens to overseas property during a pandemic?

Russian investors faced a great risk of investing in domestic development projects, as they can become drowned investments. Today, the key task is to preserve previously made investments in projects.

In this situation, the most attractive foreign real estate. Financial investors are optimistic and see a way out in diversification of invested funds. The European premium real estate market did not stop even during the pandemic, because it is always oriented towards an external client, for example, the Cote d'Azur, foreign buyers account for 80% of customers, and only the remaining 20% ​​are accounted for by French citizens. The attractiveness of the place and the reasonable support from the authorities make investments in foreign real estate more profitable and less risky.

Overseas property market will recover faster after a pandemic.

The investment attractiveness of foreign real estate is that it becomes an asset with subsequent leasing. For Russians, this is a successful alternative to the sagging rental market in Russia, where demand for housing will not return to its previous levels soon.

The high demand for rental is due to the fact that students, tourists and French from other regions are moving to the French Riviera region or a similar location. What causes sustainable growth and enables investors to combine capital growth with rental returns.

Investing in overseas property in the aftermath of a pandemic. First of all, it is worth considering that some of the measures taken by the government to stimulate the economy, especially during the COVID-19 pandemic, are quite controversial for investors. For example, the introduction of a tax on income from bank deposits and the tightening of tax policies on dividend income may lead to other ways of investing.

Against this background, foreign construction projects that are just entering the implementation stage look attractive. European countries have the most favorable price offers precisely in the framework of the implementation of new real estate projects. European law is such that it fully protects the buyer from all risks, and developers are provided with financial guarantees to fulfill their obligations to creditors. For example, the French National Institute for Statistics and Economic Research for the period from November 2019 to January 2020, an increase in the issuance of housing permits by 9.9%, an increase in demand for apartment buildings and apartments by 14.4% and individual housing by 4.1%.
At the same time, property prices in the Provence-Alpes-Côte d'Azur region continue to grow steadily. Since 2015, the cost has grown by 10.7%, an average of 2.65% per year.

On the real estate market in France or Europe as a whole, there is a tendency to maintain a fairly high demand for premium apartment buildings and a decrease in interest in villas and residences. It is explained by an increase in supply in the field of multi-unit housing, but in a club format, with high-quality finishes, a high level of security, as well as a successful, secluded location of apartment complexes. In addition, this format allows the investor to more flexibly approach the subsequent disposal of the acquired asset.

Real estate is an investment in a combination of factors: country, region, environment, quality of life, transport accessibility and only in the last place - square meters. So traditionally, the growth in the value of foreign real estate provided their owners with a percentage increase. Which significantly exceeded bank deposit rates. A return of demand should be expected as early as September, as investments in regions with traditional tourism potential remain stable. Coronavirus, on the other hand, only increased the desire of many to leave multimillion-dollar cities and move to the traditionally best places in Europe with a low population density, but without loss of quality of life.


Source: www.realty.rbc.ru

News

The most popular investment instruments for Russian citizens are savings accounts in banks, foreign

currency, real estate, life insurance and cryptocurrencies.

The real disposable income of Russians in the third quarter fell by almost 5% after a record drop of

8.4% in the second, Rosstat reported.

In September 2020, the monthly increase in consumer prices (as estimated seasonally adjusted) decreased to 0.25% compared to 0.38% in August, according to the next release of the information and analytical commentary “Dynamics of consumer prices”.

Consumer demand in the first seven months of 2020 in Russia decreased due to the coronavirus pandemic by an average of 6.7% relative to the result of January-July 2019.
Net capital outflow in January-August 2020 increased 1.7 times compared to the data for the same period last year – from $20 billion to $34.8 billion.
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