Real estate
23:31 2 December 2020
Post by: WBJ

Investing in luxury, a safe haven for capital

Investing in luxury, a safe haven for capital
Source: Ghelamco

The year marked by pandemic, tension, and uncertainty is coming to an end. Virtually all sectors of the economy have been affected by the arrival of Covid-19 and the resulting introduction of restrictions. However, as shown by the real estate market data, there are segments that remain immune to economic turmoil. During the pandemic, premium projects are enjoying increasing interest on the part of the investors as they provide a safe haven for capital.
The demand for luxury properties is not growing weaker. The ones located in the most attractive districts, with top-quality finishing and modern amenities, continue to draw investors’ attention. Luxury apartments in revitalized residences constitute a separate segment, whose value is additionally increased by their limited availability, uniqueness, and historical authenticity.
“Unlike the popular apartment segment, the supply of luxury properties is very limited. Such projects involve high capital expenditure and require a prestigious location in the most attractive parts of the city. This raises their price, enables them to retain their value, and virtually always brings profit in the long run. These are not products susceptible to market fluctuations or speculative growth. Prices in the premium segment rise slowly, but on the other hand, there is no risk of drops during crises. From the investors’ perspective, this positions them as a safe haven for capital in hard times,” Jeroen van der Toolen, Managing Director CEE, Ghelamco, said.
The lockdown and the general uncertainty among investors resulted in weaker sales on the residential property market in the second quarter of this year. Despite a lower number of transactions made, prices in the premium sector increased on average by 9 percent compared to the same period last year. In the age of rising inflation and very low-interest rates, investors are looking for assets that have the potential of retaining value and real profits in the long term. As shown by JLL data, the last decade saw continuous growth of value in Warsaw’s luxury property market. Since the last crisis, it has fluctuated at an average level of over 6%, and sometimes even up to 10% annually. The pandemic has also redefined buyers’ residential needs.
Ghelamco’s Sales Department indicates that the properties ready for occupation and with bigger living areas are currently enjoying enormous interest. One result of the lockdown is that buyers are particularly willing to buy apartments that provide access to terraces, gardens, and additional amenities such as private gyms or saunas, access to which is currently limited due to epidemiological restrictions. Luxury also means the lifestyle that the given property can offer to its owner.
Foksal 13/15 residences are an example of a property in which case the economic slowdown has not diminished customer interest. The chances for joining the group of residents of this exclusive address grow smaller each month. Despite the pandemic, the number of available apartments is decreasing and the reservations, in most cases, lead to a sales transaction. In the third quarter, the developer reported an increase in telephone queries and comebacks of customers who in previous months had contacted the Foksal 13/15 Sales Office.
(WBJ)

ghelamco
foksal 13/15
jeroen van der toolen

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