Is It Still Safe To Invest In Real Estate?

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” – Franklin D. Roosevelt.

One of the biggest questions asked by investors is whether it is still safe to invest in real estate during this global pandemic. Well, this isn’t the first time that a pandemic has occurred but it may be the first time that it’s on such a global scale. SARS was mainly centered in Asia and Ebola was in Africa so the whole world didn’t really ‘react’ in the way that it is doing now.

Global markets are held together by trust. The fear and panic generated by this pandemic have got people thinking twice about their investments. But one thing is certain, the virus will clear and the markets will recover and get back to their usual way. So the question is, what do I need to be doing during this time as a real estate agent, developer or investor? If data from the past is anything to go by then these are integral tips that will help you make the right move during this pandemic and when the dust settles, you should be standing tall.

The Ripple Effect.

Small businesses are going to be hit the hardest from this pandemic as commerce has almost come to a standstill. Fear causes a freeze and that is what is evident in all markets globally. This will likely lead to job cuts, desperation sales and some may even end up in vices just because they need to make ends meet. A lot of people will be turning to digital sources to find work or to find innovative ways to keep their business running while keeping safe.

Why You Should Invest.

For the Real Estate industry, we are already seeing a lot of things happen. Here are a few that are highlighted.

Low-Interest Rates.

The government of Kenya and other governments worldwide have lowered interest rates significantly to allow for businesses to take soft loans which are needed to keep them running. Failing businesses can lead to an economic meltdown. Low-interest rates increase the buying power of people who want to enter the real estate market. So as a real estate developer or agent you should be expecting more solid leads.

Market Strength.

Even though there are regulatory governmental bodies that oversee and monitor the real estate industry in Kenya, the industry has developed a lot of autonomy over the years. A crisis like this has caused major Universities, restaurants and businesses within the service sector to suspend all activities. The real estate market, however, has slowed down but not at the rate other industries have been forced to do. “Investors are taking advantage of the low-interest rates coupled with projected lower sales prices of properties to increase their listings in Kenya,” says Mr Kiguru the managing director of Jojean Properties.

Panic Sales.

A pandemic that lasts for a long period normally causes panic sales. People liquidate their assets to ensure cash flow to take them through the pandemic. Investors are always on the lookout for properties that are put on sale during this period.

Information is Key.

Knowledge, during this time, is power. Having the latest information on all available and closed listings in Kenya will be highly sought-after knowledge. During the 2007 economic meltdown, it was recorded that the rate at which the price of rent went down was much slower as compared to other industries.

In conclusion a pandemic causes a lot of changes in every industry. As much as some negative change occurs, there are always new opportunities created at the same time. Real estate is still a safe means of investment. As the famous saying goes, Tough times don’t last, tough people do.

“The bottom line: investing in real estate is smart because property is tangible. People always have, and always will, need shelter. This means it is very unlikely that our need for shelter (ie: buying or renting homes) will never go away.”

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