Year 2020 has shocked so many businesses. Some businesses vanished and most other businesses metamorphosed. Real estate, however, is a business that has endured worse than this and is set to bounce back. The situation will remain uncertain.
Sanan Sanani is going to share some insights on what he thinks will be the fate of real estate in the days to come; and to let me assure you, he is quite optimistic about it. I hope my questions from him will help you cover some of your daily concerns in such times.
Some of these questions will go beyond the pandemic and focus on what is ahead of the real estate world and investment. Let’s check them out:
Q. What are your thoughts on the global impact of COVID-19 in terms of real estate value?
A. 2008 was a loan problem, the credit system collapsed. 2020 is an income problem pre- and post-lockdown but prices of properties won't lose 30-40% of value like they did in 2008, everyone is waiting for that to happen but it’s not going to happen, there will be less bank foreclosures compared to 2008, I believe 15% market drop is the most we will witness and an average 20% drop in rentals.
Q. What market cycle are we in right now?
A. Although each country, even each city in a country, can be in a different phase than another, globally I believe we are in Phase 4, the recession phase, where new constructions are being completed with increasing vacancy, causing both the price of sale and rental income to drop simultaneously to an attractive and affordable level for seasoned investors and end-users.
Q. Which year do you think we will experience the next phase?
A. I suppose you want me to get out my crystal ball, shake it, and tell you the answer. Sorry to disappoint you but the answer is nobody really knows, it can happen really fast or it could happen really slow, there are many factors on a macro level that would cause the transition to phase 2. But i will say this, the trillions of dollars that the US printed and gave out as stimulus cheques are going to have consequences, the dollar will weaken due to inflation causing property prices to increase so you know how the saying goes ‘’do not wait to buy real estate, buy real estate and wait’’
Q. What is the future of real estate?
A. The future is bright, as history has shown real estate always appreciates in the long term, that I can guarantee. As long as we live in this world order and this monetary system, real estate is very advantageous to hold as it’s a hedge against inflation.
Q. Will 3D printing change the real estate game?
A. This is one of those moments where I might answer you based on the knowledge I have access to but will look at a decade or two later with a smile saying ‘’boy was i wrong!’’ but if you’d want me to throw my two cents in i would say that it potentially has the possibility of disrupting the property prices but not as much as you might think, quality always prevails. Chinese prefabricated houses take only 24-48 hours to build and they are reasonably cheap to build but that doesn’t mean the prime properties in the United Kingdom will drop 50% of its value that is never going to happen so do not worry.
As Sanan puts it, the situation is far better than the doom-and-gloom picture drawn by the media and those who wish to take advantage of the fragile market. The bottom line is do your homework and focus on your action plan.
Sanan Sanani is a real estate coach who is focused on educating online income earners how to leverage their income to diversify and create a side income by Real Estate Investing. His mission is to bring as many online entrepreneurs as he can to the world of real estate.
Disclaimer: No Deccan Chronicle journalist was involved in creating this content. The group also takes no responsibility for this content.