(MENAFN- Costa Rica News)
While the global economic crisis has left a mark of misery, there is an incredible real estate boom in many countries of the world. In markets such as Turkey, the Philippines, or Germany, the price of houses soared in the second quarter of this year, despite the profound economic effects caused by the COVID-19 pandemic , according to an analysis prepared by the Global Property Guide firm. In this global ranking of increase in the value of homes , Mexico ranks 15th (and first in Latin America) and the United States 16th.
This unusual real estate boom in some areas of the planet occurs when the projections of organizations such as the International Monetary Fund (IMF) speak of a global economic contraction of 4.9% for this year and while stories of families who cannot pay your mortgages or tenants who have been with unpaid rent for months has been widely reported.
Thus, while some families fear being left without a place to live, others are buying houses – either as an investment or to live in them – in a phenomenon that reflects the social inequality that has become even more evident with the crisis.
As in any recession, there are winners and losers, those who have kept their jobs and had savings, are taking advantage of the fact that interest rates on mortgage loans have reached historically low levels. And that fall in the interest rate has been the main fuel that drove this phenomenon in several countries.
From those who are investing, ''the lower the bank interest rates, the more attractive a good that generates income becomes,'' Matthew Montagu-Pollock, founder of Global Property Guide, states. And given the current international financial conditions, investing in a home has become more attractive than putting money in other sectors.
However, there is caution since one of the characteristics of today''s market is that prices have risen and at the same time the overall volume of transactions has fallen. That is, fewer houses are sold but at a higher value. But since real estate markets have very specific characteristics in each country, this rule does not apply in all economies.
The other side of the coin
But just as in some countries prices have risen, in others the value has fallen. In the second quarter of this year, the worst falls in the price of homes compared to the same period of the previous year were registered in markets such as Egypt (-17%), Pakistan (-4%), Puerto Rico (-4% ), and Malta (-3%). And among the large Latin American economies, Peru suffered a drop in the price of homes in the second quarter of this year of -0.1%.
Although Argentina is the third-largest economy in the region after Brazil and Mexico, it was not included in the Global Property Guide analysis, because it is more difficult to be certain about the figures.
According to property brokers consulted, in Argentina prices have remained more or less stable at the national level, given that, unlike other markets where lower interest rates have driven purchases, in this country ''there is no credit'' and therefore most of the population has to opt for rent. In this sense, they say, ''Argentina is an exception, which does not follow the general trend of other markets.''
Another element to take into account when analyzing price variations is that within the same country, trends by the city can be diametrically opposite. One thing is what happens in the real estate market of Mexico City, Sao Paulo, or Bogotá, and quite another is what happens in small cities or geographical areas with little economic development. And it is the same from one neighborhood to another. If prices skyrocket in one sector of a large city, statistically it will drag the average price, but that does not necessarily mean that the boom is homogeneous.
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