“The real estate sector as a whole is starting to regain its attractiveness although this is not yet the case in Spain.” This is one of the conclusions that Ramón Forcada, Head of Analysis at Bankinter, drew in his recent study on opportunities and strategies for the third quarter of 2013.
Forcada recommends increasing investment in the US real estate sector due to 6 signs of a recovery. These signs are also starting to emerge in other countries:
1. Price: The USA’s Case Shiller index shows an 11% rebound in US house prices.
2. Tightening supply: Construction has slowed allowing markets to absorb stock and thus lessen supply.
3. Financing costs: Interest rates have fallen globally and are close to 0% in many countries.
4. Valuations: Valuations are becoming ever more reasonable and are adjusting to the realities of the market.
5. Investment: Options for profitable investment are currently scarce and the real estate market is presenting some attractive opportunities.
6. REITs (Real Estate Investment Trusts): The amount of expendable capital is growing globally which will push REITs to increase their own investments in the property sector. This process is already in evidence in the United States.