A market is determined by supply and demand. Property prices in Europe have almost doubled and tripled in recent years. Obviously, something has changed quite seriously in the area of supply and demand. What was it exactly? Despite the price increase, many citizens still want to invest in so-called concrete gold. After all, real estate has proven to be one of the safest assets. Unfortunately, however, especially private investors do not know where and how to find suitable objects. We therefore explain the background of the real estate market and show how you can find some good investment opportunities after all.
Why are property prices rising?
In recent years, the property market has seen a development that started with the ECB’s zero interest rate policy. There is no more interest on their savings accounts. Bonds do not yield any returns. Sometimes even they even offer negative interest. Therefore people looked for investments where they could make at least a little profit. That is why they were willing to pay much more for an object than before the financial crisis.
At the same time, those who own a property have a problem. They could sell it well, but then they would be stuck with the money. So, what to do with it, if they themselves do not achieve a return? Accordingly, many owners have taken their properties off the market and prefer to enjoy the massive increase in rental income. Except of course those who are active as entrepreneurs or investors. They sometimes sell entire blocks of flats or apartment buildings because they can make more out of the capital elsewhere. Such large projects usually do not appear on the free real estate market at all, because they are not advertised.
All in all, there is less real estate in circulation than at times when banks still charged interest. One can still invest in large projects even now. These projects are difficult to find for private investors. Here is a video that explains how you can still get suitable investments:
How to get good properties
There are real estate funds and investment agencies that maintain a large network of partners. Like the real estate investment broker in Ahlen, for example. There, so-called off-market properties are brokered between buyers and sellers. This is where investors who deal with large transactions and are not only interested in individual apartments or small houses turn to. Depending on how much someone wants to invest, such agencies establish the appropriate contacts between two suitable parties.
Otherwise, profiting from the real estate boom is still possible indirectly. You can buy shares on the stock exchange of companies that are involved in selling and renting on a large scale. Instead of renting, you simply collect dividends there. However, you must bear in mind that shares can always be subject to large fluctuations in value. Even if the business of a company is absolutely solid. In the event of a crash, most securities are simply sold out blind. Such price fluctuations are rather not to be expected with direct investments.