Of course not!
It's no secret that the current economic climate is not very encouraging, especially for those looking to invest in real estate. The sudden rise in inflation and interest rates, as well as the fall in stock market prices, suggests that now may not be the right time to take out a mortgage. But is that really the case? Could this actually be the best time to pursue a real estate project before the situation worsens further?
Invest now: why?
Although the situation does not encourage heavy investment in real estate, it is actually an ideal opportunity to start a real estate project and save money.
Firstly, the recent rise in interest rates does not necessarily mean an increase in the proportion of monthly payments in a household's budget. It should not be forgotten that the rampant inflation seen in recent months is not going to end any time soon. Continued inflation over the coming months, if not years, will be accompanied by nationwide measures to protect purchasing power. These measures will include indexing incomes and rents, in other words, an upward revision of salaries and rent receipts. By taking out a loan now, a household will have to pay monthly installments that will remain unchanged, but their income will increase year after year. The proportion of the monthly installment in relation to overall income will therefore decrease over time.
The impact of rising interest rates on real estate investment
The second reason why you should invest in real estate without delay is the long-term rise in bank interest rates. When the economy is in crisis, many people choose to wait for the situation to return to normal before investing, hoping that rates will fall quickly. However, it now seems clear that the rise in bank rates observed over the past few months has not stopped, quite the contrary. The European Central Bank has announced a 0.5% increase in its key rate for the end of the year, the first increase in more than 10 years. This increase will logically be accompanied by a cascade of interbank rate increases and, by extension, higher interest rates on loans. Interest rates are not the only thing on the rise: real estate prices have also skyrocketed, with certain types of properties (closed houses) seeing their value increase by more than 30% in just two years. Furthermore, while real estate investment is more expensive than before, it is also much less so than it will be in the future. That is why it is in everyone's interest to start investing in real estate as soon as possible.
RGF supports you in your real estate project
Aware of the difficulties our clients face in financing their real estate projects, we strive to work with them to find a solution tailored to their financing capacity and needs. Our independence from our partners allows us to provide truly relevant advice and solutions to our clients, without being influenced by third parties. Our clients deserve the best in financial advice and analysis.
Faced with the difficulties posed by the current economic situation, it is necessary to redouble our ingenuity in order to develop financial projects that are viable in both the short and long term. RGF does not hesitate to implement sophisticated and optimized arrangements in order to reduce the financial burden as much as possible. The expertise and experience of our teams have enabled us to satisfy our customers for many years.