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Investment continues to drive solutions and trends!

A little more and a couple of years ago, Imobintel did a study for a client in which we focused and chose some of what would be the housing solutions in the near future.

For our happiness, we hit practically all the solutions that we identified as having the greatest potential to develop.

Among them we find the "multifamily", senior or student residences, among other solutions, such as "build to rent".

Now, these formulas for developing housing have gained relevance and supporters, as well as a lot of information developed by multinational companies in the area.

Despite the small pride of those who identified solutions that may have helped our client to develop solutions with a future and potential, and before the competition, we are still perplexed about what is being developed in the territory.

The title of this news "Multifamily investment in Europe reaches €92,000M" can tell us a lot.

As we all know, and many present as a cause for the situation (namely in terms of prices) that the supply is found, the so-called lack of stock.

It is therefore curious that investment levels have not grown to the levels they had in the 2008/2011 crisis (and it is not exclusively related to bureaucracy and licensing or material costs).

But are some of these trends relevant to the market and the demand that exists?

Is the market prepared for some of these solutions and, above all, is the majority of families (or perhaps it is better to refer to consumers, since the aggregates or inhabitants of these spaces increasingly have different compositions from the past) have the capacity to absorb these solutions at the prices at which they are presented to the market?

VSeveral European countries, and of course, especially before the pandemic and this first major conflict in European territory, had some of these housing models and, even so, they have had difficulties in guaranteeing supply to the locals (pushing them more and more to the peripheries ).

There are even cities and governments to oblige that the offer is also for those who are residents and natives of the territories, imposing barriers.

However, and despite the information, and what has already been learned in cities like Barcelona, Paris or Berlin, there is no intention to direct and manage investment within the geographic spaces of cities, for publics that keep them alive and dynamic, and that are not part of tourist movements.

All the solutions that have been developed can be useful for the inhabitants, but it is necessary to look at the socio-demographic characteristics that, unfortunately, are the reality of the territory. Not transforming cities into a cultural melting pot where Portuguese nationality is not represented.

And essentially what differentiating solutions are we talking about?

  • The "multifamily"

  • the senior residences

  • The student residences

  • The "serviced apartments"

  • The "Coliving"

  • Etc.

Basically, everything is solutions that adapt to the formats of families (or individuals) and the way they prefer to enjoy their way of life and inhabit the city today.

Spaces that provide private space, with the possibility of interacting with others from the same nucleus or lifestyle, as well as enjoying shared services that can provide a better quality of life for their residents.

However, many of the investors and promoters who have developed them, oriented towards audiences with above-average incomes, even in the "buid to rent" solutions (which still do not attract so many fans in our territory), do not consider fringes of the markets that have a potential huge in terms of business and purchasing potential.

And although we hear weekly (not to say daily) references that the market is in good health, and that there are many investors, there has to be a framework.

Also because there is a lot of investment in offices, warehouses and other structures that are not oriented towards housing.

And there, strategic advice and assistance, which must be developed with the beginning of projects, assumes great importance to enhance any solution for any audience. A way to better understand and value the solution, and a more likely way to achieve profitability and good results in all projects.

And the present situation, despite being very gullible with regard to unemployment levels in the country, never goes into depth about what type of job this is and what income levels it corresponds to.

Even when the volume of home loans has, again, reached values that are too high on the part of the banks, for our reality.

Another factor that becomes more relevant, especially in a phase of conflict such as the current one, is related to economic developments, living costs, as well as related issues such as the evolution of interest rates.

The change, which is expected to rise, in interest rates, including as a way of mitigating the inflation that is already going through at this moment, will impact all those who have loans, namely in housing.

Especially when the unfortunate conflict generated serious problems in terms of energy and supply, which had not yet recovered from the acute periods of the pandemic.

If this point is reached, and making the acquisition of housing something prohibitive for a large part of the population (do not forget that the number of single-parent families, or people who live alone, increases exponentially according to the senses, which often do not have access to the credit), will the values charged by these so-called "alternatives" ever be a solution?

It does not seem.

So what will happen to the thousands of Portuguese who will, once again, face difficulties, namely in securing housing?

Investment solutions must also include the analysis and assessment of future situations. Namely, it wants the entry strategies as, when necessary, the exit ones.

A real estate investment continues, sometimes, to be analyzed as a way to invest money safely, not creating value, whether for the brand or for the user, but only as a form of quick returns.

But in complex scenarios, the existence of previously developed plans and a clear analysis of the situation, provides the possibility to manage and generate continuous gains and capital on the investment, and of a brand in the future.

Brands are assets that can be very valuable, even if it is locally. Transporting value into the future and throughout its history. But that capital also has to be managed.

Just look at some of the oldest and most valuable brands in Portugal and the world.

But that would already be a topic for another post.

New models are a good evolution for the market and for many of its audiences, and can guarantee housing spaces that simultaneously serve new lifestyles.

However, it seems to us, they must be a way to guarantee solutions that serve the most diverse audiences and market situations.

What do you think?

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