Where to invest in 2021 to Earn More Or Protect Yourself During the Crisis?
The health crisis is far from over, but many are already wondering “where to invest in 2021?” “. Anticipation is indeed one of the watchwords of investing and it is reasonable to know which direction to take this year. This year that should be more complicated economically speaking than the one we are in.
This observation, therefore, implies the need to be well informed in order to circumvent all the pitfalls that may attach to real estate investment in London or any other country than one’s own.
For this reason, we have put together a list of countries where it is good to invest next year when the world defeats this virus that has caused so much damage. But first, let’s take stock of the current state of the market and then look at the countries where real estate can be attractive.
Introduction On Where To Invest In 2021?
The most successful investors are those who see opportunity even in critical situations, as they do today. Asking the question “where to invest in 2021” is therefore a way to take advantage of the opportunity to find goods at reduced prices in the current context abroad in order to be able to build an attractive income from 2021.
Let us recognize that real estate agents are not in sharp decline around the world, so we will have to seize the opportunities now in the year 2021.
Falling world Real Estate Prices?
In numerous publications, journalists argue that the current crisis could not lead to a fall in the price of real estate in France. They seem to be right if we refer to the figures for the year between March 2019 and March 2020 concerning the sale of old homes in the country.
The price of transactions concerning these goods has indeed experienced, during this period, an increase of 5% throughout the national territory.
These figures are misleading, however, because confinement began in mid-March 2020 in France. therefore only concerned about the last two weeks of this past year. Despite this, moreover, we could not prevent a significant drop in sales during this period, which even reached 22% in Île de France.
We must therefore wait for the report covering the entire first half of 2020 to give an opinion on the matter. Recall that there are already experts who argue that the drop in prices for the whole of 2020 should reach 4% in the provinces and 7 to 10% in Paris. But what about the situation abroad?
you don’t have to look far to find countries where a significant drop in real estate is already noted due to the current crisis.
This is the case for the United Kingdom, where the largest month-on-month decline since February 2009 was noted for April 2009: 1.7%. This figure, which seems insignificant at first glance, is much higher when translated into price: 4,000 pounds per property on average for a median price of 218,902 pounds. The fall in real estate is much greater there than in France, with a collapse of 53% of transactions over a period from April 2019 to April 2020.
Spain, One Of The Most Cited Country
Spain, one of the most cited countries when asking the question “where to invest in 2021? Was also not immune to the effects of the coronavirus on the real estate market. A recent publication of the daily El País has indeed revealed that there was a drop in real estate sales of 6% in February 2019 compared to February 2019.
Obviously, because the report which is at its origin does not yet concern the months of confinement, we must wait for the next one to have a precise idea of the situation in the country. We note all the same that by scrutinizing the ads on local real estate sites.
Many owners have already resolved to reduce the selling price of their property for sale by 20%, a decrease of 10% more than that advanced by the real estate agents practicing in this country.
Real Estate Returns Around The World:
Before the health crisis and the ongoing economic crisis, real estate experts gave us certain countries to invest in 2021.
In France, we talk about a good rental yield of around 5% gross before taxes. In most cases, however, achieving such performance is not guaranteed. For people who are wondering “where to invest in 2021?” It is important to present them with the countries where the yield is the highest, based on the CBRE residential ranking.
The list is occupied by the Emirate of Abu Dhabi where the average property price per square meter is 3000 euros for an average rent of 2498 euros. This gives us hope for a return on investment of 8.5%. And the demands are not about to decrease, knowing that every year, for the past few years, about 3,000 new dwellings have been added.
More surprising than it sounds, the state of Illinois in the United States is second to the Emirate of Abu Dhabi in terms of annual rental yield. Annually, 203,000 euros on average are spent by each investor in Chicago for the acquisition or construction of the real estate. No loss is to be feared knowing that the average rent in this city is 1379 euros. We arrive at an annual return of 8.1%.
The Third Place Of The Countries:
where it seemed interesting to invest abroad in 2021 for a better return is the Emirate of Dubai. The number of homes that have been added annually in recent years has exceeded 35,000. Enough to allow people who buy them for 3,106 euros per square meter to enjoy an average property yield of 7.5%.
Another American state occupies third place because of its attractiveness linked to its climate and its ideal geographical location: Florida. Without a doubt, Miami is the city with the highest real estate yield.In fact, local housing may be purchased for an average of 296,000 euros and rented for 1,060 euros, yielding a 6.1 percent rental income.
The last member of the top 5 in Spain. Buying housing in its capital Madrid certainly requires an average budget of 508,000 euros, but we had an average rent of 1,312 euros sufficient to enjoy rental profitability of 5.8%.
If we extend the list to a top 10, we find countries where the rental yield net of tax varies between 4.5 and 5.5% thanks to their attractiveness to tourists and retirees, the price of their more affordable housing, and their flexibility in tax matters: the Dominican Republic, Morocco, Portugal, Mauritius, and Brazil.
All these figures do not in any way take the impacts of the health crisis and the current economic crisis.
Tourism is significantly hampered, which will reduce the seasonal yield of many Airbnb rentals, for example. Worse, for investors financing themselves on credit, we will have “breakage” with forced sales. But on what type of goods? When? At what price? To rent to whom then at what return?
Who Will Be The Losing And Winning Real Estate Markets?
Who will be able to buy if mass unemployment will be a harsh reality for the next few years?
Will investors be able to wait long when the fear of a fragile banking system will lead them to quickly protect their savings in stone?
The world will change and smart will be the one who is able to anticipate the big trends in real estate.
It, therefore, seems too early to hope to see sharp declines in quality goods or scrapping areas that investors may favor.
We will therefore focus on controlled geographic areas where we have visibility.
