Real estate has long been considered a safe haven for investments, whether it be purchasing your own house and having it as an asset, or investments in companies that develop property – Real Estate Investment Trust (REITs) – and share the profits with investors. But why now is such a good time to invest in this industry? Below we have a look at a few reasons why.
1) The world is still going through rapid growth
Developing countries are building commercial buildings and housing at a record pace. Whole cities are being redeveloped or popping up within just a few years – see China and South East Asia. Even developed countries are upgrading their infrastructure and this has contributed to a construction boom. The REITs involved in these projects are are the forefront of these projects that are often backed or supported by the government, making them a safe investment opportunity.
2) Land scarcity only means prices will go up further
Prices will only continue to increase and as the saying goes, “the best time to plant a tree was 20 years ago, the second-best time is now”. Investors who have been investing for longer periods tend to have better returns than those who are newer, regardless of how the market has been within that period. Another relevant saying for this is “time in the market beats timing the market”.
In inner cities and surrounding areas all over the world, land is becoming more scarce as it is being snapped up by investors. If development continues, then the land will only continue becoming more scarce and increase rapidly if good developments are made such as high-end malls, housing and public infrastructure such as transport hubs.
3) The industry supports many others
There are so many industries and businesses that rely on the success and growth of the real estate industry and this shows how important this industry is. From the whole construction supply chain of materials and construction equipment to the manpower needed, to even the equipment and technology that becomes the finishing touch to these projects like the visitor management systems installed and general IT need for sites to run smoothly, this industry supports like no other. Investing in this industry now and supporting the growth has a knock-on effect on other industries and contributes to growth all around.
4) It’s easier than ever to invest
No longer does it take weeks to research the industry and then spend time talking to a broker and explaining what you want and how much of it; no, now we can do it all at our leisure from apps on our phones such as eToro. This simple, convenient way of researching and investing is making this more accessible and will therefore drive up demand. More demand usually results in increased prices, so it is better to get it now rather than later!