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Real estate proves its value time and again

What was initially termed the credit crunch has now become a global economic crisis. Stock markets worldwide have plummeted. Prices have also fallen in some real estate markets in Europe, such as in the UK.

We believe, however, that the credit crunch is simply the overture to a different way of thinking about money and power. A positive way. And that will also have an effect on the real estate market.

Many Dutch people have a larger or smaller share portfolio, which can be invested in a conservative or an aggressive manner. The more aggressive the investment, the higher the profit potential, but also the greater the risk of loss. And it is precisely these risks that have hit investors in recent weeks on account of the credit crunch in America. As a result of the huge financial crisis in America, stock markets worldwide are reeling and prices are falling. In no time at all, even a profitable investment fund, such as Fortis, can turn into a nightmare and the investor will be whistling for his money. The fund can collapse in just a few days!

Real estate as a solution – Although in other countries such as the UK, Ireland and Spain, the real estate markets have also fallen, we have no doubt that investing in real estate – i.e. in tangible bricks and mortar – is profitable in the long term. The fact that the real estate markets have fallen in several countries is only logical. The price levels were, to some extent, inflated and the bubble has now burst. People now have their feet back on the ground.

Second homes – Over the past eight years the market for second homes has also become inflated in an unwelcome way. To attract clients, many developers have dangled high, often ‘guaranteed’ returns in front of prospective buyers' eyes. In practice, these returns have only been possible in dribs and drabs, or even not at all. Worse still, some developers were not developers but out and out con artists with nothing but pretty stories.

The position of CasaMundus – In our many years of activity in the market for second homes and international real estate, we have always stuck firmly to the truth. Our forecast returns are always based on the current situation, in particular in the tourist market. At the moment, there is no reason yet to adjust the returns downwards. We are encouraged in this belief by the statement by Nick Bosch van Rosenthal, director of Belvilla, the largest online letter of holiday homes in the Benelux. He says: ‘We have had more reservations for holiday homes in 2009 than at the same time last year, in spite of the crisis. We are growing.’

Investing in real estate is a long-term investment. High profits within a short time are in principle difficult to achieve, and this also applies to second homes. They are, however, always stable investments with a secure fixed value. This gives you peace of mind. Moreover, investing in a second home also means that you get to enjoy the property for your own use, to experience the pleasure of carefree holidays. Feel free to have a chat about this with Anton Sinke. Call 020-4471050 to make an appointment.