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The COVID-19 pandemic has significantly impacted financial markets and the global economy, leading to concerns among investors, property owners, and prospective real estate buyers about its effects on the construction market.
There are no specific studies on the current economic situation of the construction sector in Brazil, but some data suggest optimistic outlooks for the economy after the crisis.
44% of the companies affiliated with the Brazilian Association of Construction Materials Industry (ABRAMAT) reported positive sales performance in June 2020.
The research emphasizes the need for investments in the medium term, with the percentage rising from 43% in May to 52% in June despite the effects of the COVID-19 crisis.
The construction industry and the real estate market will play a crucial role in the country’s economic recovery after the pandemic, despite the current uncertainties caused by the coronavirus.
The construction market serves as an accurate indicator of the country’s economic health.
We will examine the current situation and discuss the status of the construction market in Brazil, along with its medium and long-term trends.
The significance of building projects in the aftermath of the pandemic.
The crisis has caused a state of complete unpredictability globally, affecting various sectors of the real estate market significantly.
Business operations and public policies can further complicate the situation.
The 2020 real estate market forecast for builders targeting the average to high-income bracket had a positive outlook due to lower interest rates and increased access to credit.
Until the WHO declared the COVID-19 pandemic, growth forecasts were at 3% for this year, mainly due to family consumption and private investments.
Even in the current challenging situation, there is potential for a positive outcome for real estate firms over time.
The construction industry has consistently been a top performer in boosting the economy after a crisis.
Firstly, because property is highly valued in Brazil.
The construction industry is the biggest user of raw materials globally, representing half of steel production and utilizing 3 billion tons of raw materials worldwide.
It is a sector that provides resources and jobs promptly, thus stimulating economic activity.
What is the status of the construction industry in Brazil?
Despite the economic downturn affecting the construction industry in recent years, the real estate market has continued to thrive.
In November 2019, the construction sector employed around 2.09 million individuals, according to Caged data.
Despite appearing insignificant, the figure underscores the sector’s significance in driving the labor market amidst the current economic conditions.
If the economy grows, it leads to an important cycle where civil construction also grows, resulting in increased employment and income.
The increase in this growth, along with the decrease in the benchmark interest rate (Selic), has increased the appeal of real estate funds for investors.
Analyzing the construction industry reveals a positive financial environment despite uncertainties, making it an attractive option for investors, including conservative ones.
This is a good time for investors to switch to a safer investment route in order to minimize potential losses and focus on stable and profitable assets.
Understand how profitable the construction industry is.
Financial stability is just as crucial as good health, job contentment, and relationship security, right?
It is intriguing to consider an investment that yields lasting favorable outcomes.
The Gross Domestic Product (GDP) of 2019 in Brazil, as reported by the Brazilian Chamber of Construction Industry (CBIC), saw a 1.1% increase, reaching a total of R $ 7,257 trillion, with construction showing a growth of 1.6%.
This significant increase in the construction industry helped drive growth in both the national GDP and industrial GDP by 0.5%, halting a five-year decline in the sector.
Investing in construction industry stocks is now more beneficial due to the improved indices.
Investing in real estate presents a promising chance for future financial gain.
The variation in the civil engineering industry
Construction needs to amass $93 billion in assets by 2025, as stated by the World Bank.
Investors should make use of the decrease in interest rates to benefit from investing in corporate stocks and real estate assets.
The reason is that the construction industry provides:
- Returns from this investment option are more secure compared to many investment funds.
- Generate more earnings with reduced risk compared to the stock market.
- Alternative to funds that provide fixed income.
Is the Property a secure investment post-crisis?
Many individuals are likely to be hesitant to make investments due to factors such as unemployment, wage reductions, business closures, and job instability.
Real estate sales in Brazil have risen despite the ongoing coronavirus pandemic.
The FipeZap index reported an increase in real estate transactions, with a rise of 0.18% in March, 0.20% in April, and 0.23% in May.
The increase in real estate demand is due to low interest rates, reductions in the Selic rate, and a decrease in the cost of real estate loans.
Additionally, the stock market experiences significant fluctuations.
Other factors are at play in the real estate industry.
Many people have recently discovered the option to work from home instead of commuting to the office, which is starting to impact the market.
Many people are currently searching for bigger homes with extra room or located further away from city centers.
Some experts believe that the real estate market expects to find ways to do business with clients after a crisis.
The viewpoint is that the real estate investment could outperform the stock market as a result of increased demand for rental properties, residential units, and investments.
The real estate market can generally be depicted in two different manners.
Whoever is wise will seize the current opportunity to purchase your property at a lower price. Investors in stocks or funds should take note of the potential benefits, as government bonds and stock prices may offer low returns.
If you invest in stocks or funds, you will see the benefits of the current situation as government bonds and stocks may have low returns.
Monitor your reading progress to enhance comprehension.
Why is investing in real estate crowdfunding considered a secure option amid the current pandemic?
Real estate is a more secure investment than commonly believed, particularly in times of crisis. As previously mentioned, the real estate industry demonstrates long-term stability in comparison to other investment options.
Real estate, being a tangible asset, typically increases in value over time, as evidenced by market trends during pandemics and past crises.
Even during uncertain times like now, the real estate industry stays relatively steady and will remain a top investment choice.
Collective real estate funding offers a way to expand your investment portfolio beyond stocks and funds.
It is crucial to always have a more profitable option to diversify your investments and keep a balanced portfolio.
Crowdfunding is the upcoming trend in real estate investment.
Real estate crowdfunding is a recently emerging trend that is becoming more popular.
Most novice investors are familiar with real estate investments primarily through direct investments, such as purchasing a property for renovation and long-term rental or investing in a particular project using private money loans.
Most of us are restricted in the amount of projects we can invest in simultaneously when using the conventional method of direct real estate investment.
Real estate crowdfunding broadens the access of individual investors by offering diversification and increased business opportunities, making real estate investment available to a larger group of people.
Real estate crowdfunding typically requires a long-term dedication.
Real estate crowdfunding involves making investments that yield returns and result in long-term capital appreciation.
Careful selection and evaluation of returns are vital when making investment decisions.
You can participate in real estate investment through crowdfunding.
- Real estate companies.
- Earning ventures;
- Purchase business property assets (cash assets).
- It can also be utilized as a goal for funding real estate liabilities.
Real estate crowdfunding is considered a secure investment option during difficult circumstances.
In conclusion
INCO offers a great investment option for those interested in real estate, providing security and strong returns.
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