We asking Janis Ozols, Partner at Colliers, Valuation, and Advisory.
The world economy experiencing high volatility and uncertainty garnished with high inflation.
At such times investing is crucial to not lose your savings value, but were to invest? Real estate is considered one of the safest investments, but is it so in current conditions? We asking Janis Ozols, Partner at Colliers, Valuation, and Advisory.
What is the current state of the European real estate market given post covid and the war in Ukraine impact?
After the initial shock, market participants – both private and corporate – seem to have entered a state of mind that life and business simply have to go on. We have to keep in mind that available capital is still at record high levels and is looking for opportunities to be deployed. With high inflation, the urge and appetite to turn equity into assets increases even more.
And all of sudden energy efficiency and sustainability are no more something nice to think about but an urgent matter to be addressed.
Do real estate prices approach an artificial price peak and what will happen when the situation will normalize?
I would refrain from making statements about whether we are at a peak or not. Reliance on just short-term capital value growth is risky at all times. You have to understand the long-term perspective. And that is most likely different between sectors of the real estate market and various geographies.
Is it a good idea to invest in real estate in the current situation and if yes in what type (Development, buy to let, commercial/rental)?
If you have equity laying around in the bank, then a property yielding rental income is surely a tempting option. Provided it is matching your risk profile.
Residential rental and logistics assets are in trend currently. Also, offices have their demand, and so do certain (but not all) retail property segments. Many see tempting opportunities in the hospitality industry.