Europe “gains shine” for real estate investments; US loses appeal

The aggressive rise in rates by the Federal Reserve was a brake on the sector of real estate in USA (EU) during 2022, which generated a 35% drop in sales at the end of the year, according to Mariano Capellino, founder and CEO of the firm specialized in investments en Real Estate INMSA.

During the ninth edition of the “Meeting in Mexico for Investors and Family Offices”, the specialist indicated that this behavior in the North American country caused the investors in real estate They have turned to see other markets, such as the European one.

“In Europe, rates began to rise more gradually and the impact was less. If we look at the 200 largest real estate funds, we will see that a large part of them migrated their capital from the United States to Europe,” added Capellino.

Looking ahead to 2023, the founder of INMSA explained that the economic environment is complicated, so this year the Real Estate will not be favored globally.

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In this sense, the United States is emerging as one of the most affected countries, since the rate of return on asset income is not competitive when compared to the interest rate on mortgage loans.

“The United States will not be attractive, because the rate of return will continue to be negative and the market will continue to contract,” Capellino said.

On the other hand, the specialist mentioned that although this 2023 will be recessive in Europe and appreciations will hardly be seen, for 2024 the outlook is more favourable, especially in countries of that continent with sufficient real estate inventory available.

“In particular, Spain represents an opportunity because there is a lot of inventory in the banks and, given the fear that these continue to increase, the funds could enter at discounts. We see opportunities in the commercial retail sector, which was the country’s star segment in 2022, logistics and tourism,” said the CEO.

Mexicans target Spain

According to José Trueba, director of solutions for the investment firm Amicorp Mexico, “The investorsat least in Mexico, they are pointing to Spain, since there is an ease of migratory movements there ”.

He also explained that the aspects to consider when investing in this kind of markets are summarized in obtaining the correct advice: “currently, the world has a great exchange of information on tax issues, so it is important to take care of how you invest and be advised by experts.

For this reason, together with the objectives of the families, he insisted that it is essential to be clear about the tax obligations that must be met in order to invest abroad in the best way.

Finally, Capellino stressed that one of the challenges that the mexican investors in 2023 it will be to choose between preserving your capital or obtaining high returns.

“To preserve capital, long-term passive management will suffice because the real appreciation rate of a property equals inflation. But if we want to increase capital, we must opt ​​for active management by moving from one segment to another, taking advantage of market cycles”, he concluded.