Real estate facing Coronavirus: investing is thinking
The april 21, 2020
As expected, the health crisis triggered by the coronavirus epidemic is impacting the real estate market. When the economy is bad, we can resign ourselves and wait for it to pass. Or we can react and look for solutions to make it better.
At Wealth A7, you know, we prefer to take the lead! Do you have a concern? We are here to help you ! for example :
• Work in progress:
The construction sector has come to a halt since the announcement of the containment of the population with the standby of 95% of the construction sites underway in March. Since the beginning of April, companies can take over construction sites subject to compliance with health rules ensuring worker safety, but the unions consider this resumption premature. So she’s relatively shy at the moment.
What this means for you:
Have you invested in new real estate and plan to take delivery of your property this year? If the delivery of your property is postponed to next year, then the tax benefit that you had planned for 2020 will also be postponed.
Are you losing your tax benefit in 2020? Contact us, we have solutions to optimize your tax!
• Building permit applications:
If building permits expiring during the confinement period have been extended by 2 months from the end of the state of health emergency, the processing of new applications is suspended, the competent services being closed . The postponement of the 2nd round of municipal elections is also bad news because it will be necessary to wait until the new teams are in place for the allocation of building permit authorizations.
What this means for you:
In 2020, there may be a significant contraction in the number of building permits granted. The supply of housing in new real estate will therefore be reduced in 2021 and 2022.
Good deals will be rarer. Contact us to quickly position yourself on the projects that have the best characteristics.
• Notarial acts:
In order to limit the impact of the crisis on current building projects, the government has exceptionally authorized the remote signing of notarial acts. It is still necessary that all notarial studies be equipped with an electronic signature system, which is far from being the case ... In fact, delays are accumulating.
What this means for you:
Did you think about finalizing your project quickly and your hopes were dashed? Wealth A7 already works with notaries capable of having you signed remotely. Contact us and we will explain how to do it.
• The “SCPI”:
Professional tenants have been authorized to suspend the payment of their rents. Some landlord landlords are even encouraged to waive these rents. The potential bankruptcies of the tenant companies could also impact as much the yield as the valuation of the SCPI: no rents or less rents = no or little yield and no tenants = a multitude of goods for sale on the market and prices at the decline because few buyers.
What this means for you:
You wanted to invest in SCPI shares of offices and shops? Instead, select more diversified SCPIs and bet on future themes: health, education, residential to a lesser extent. Call us and we will help make the right choices.
• A real estate project:
Until recently, real estate investments were boosted by very attractive credit conditions. Recently, interest rates have risen and the terms of granting have tightened. As for the crisis, it hit businesses and layoff plans were to follow one another. It is also sad to say but it is an observation: the confinement causes separations and the virus increases the number of deaths… Under these conditions, the demand for old real estate will decrease while the number of properties to the sale will increase.
What this means for you:
In older real estate, when demand goes down while supply goes up, prices go down. If you had a project, temporize a little: it is very likely that the opportunities of tomorrow will be much more interesting than those of yesterday!