Is It A Good Time To Invest In Commercial Real Estate?

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Right now, the economy along with the world is suffering from the effects of COVID-19 and many businesses are closing shop, albeit, temporarily. Hotels, restaurants, and other service-oriented enterprises are bearing the brunt of the economical fallout the virus has inflicted globally. Real estate is also facing setbacks as a result of the current trend with property values dipping by 10 to 30 percent. This begets the question, is it a good time to invest in real estate, particularly commercial in nature?

Market Conditions

In almost three decades, Australia has once again experienced a decrease in the GDP for two consecutive quarters, and that usually signifies a recession. If you’re cash-abundant, it may be a good time for you to buy properties. You don’t have to time the market as this looks like a short window, even as currently, demand is low, the intrinsic value of a real estate would still be a factor in its pricing. And you’ll still have to manage if the prices go down a bit in the coming months.

With premium estates going down 5 to 10 percent, you’ll be in a better position to reap the benefits of an upturn. When you talk about commercial spaces, it’s vital that you keep an ear to the ground about how businesses are fairing right now. While many establishments are starting to open up, there are still many who are temporarily ceasing operations and terminating leases for areas where there is a relatively slow movement. This will soon pick up as many people surveyed are very optimistic about the future prospects which give an indication that investing now would give you a healthy margin once the pandemic is over.

Outlook

As with the Great Depression in the 1930s and the recent 2008 recession, you can expect low-interest rates and government stimulus packages to garner some price corrections, maybe, as low as 8 percent. This means that some properties may experience growth as early as at the end of Q4 of this year. When looking for commercial properties at this time, a reputable and unbiased building inspections Brisbane can help you purchase your new place of business. However, even with all this optimistic outlook for the following year, you can be sure that there will be a lot of challenges in between. So it’s important to know which (or where) properties you should invest in. 

You Need to Choose Wisely

We’ve already established that even in this unfortunate situation there could still be an opportunity to enjoy the high rewards in the future, you just have to know which commercial properties to invest in. You might want to hold off on purchasing office, commercial spaces, especially in high-rise properties, as working remotely is getting more popular and widely utilized. However, retail brick-and-mortar spaces are still being utilized, albeit many shops are closing down, you have a better outlook when things get back to normal. You might also want to invest in premium properties as their prices won’t easily drop, so you’ll have some cushion in the following months, and these tend to increase in value significantly when things will eventually be copacetic.

You can always find value even in the most unfavorable economic situations. Right now, there is a window to buy commercial properties that have temporarily reduced its market value. Real estate should always have a 7 to a 20-year horizon so this setback should not affect your motivation to buy property in the best location you can afford.

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