Most analysts consider that the most recent economic developments (strong and rapid increase of interest rates, uncertain economic context, high inflation,….) should lead to a global decrease in the (relative) value of residential units.

💡 But what if at the same time the supply of housing has decreased because developers have an harder time to obtain financing from risk adverse financial institutions, because 𝘁𝗵𝗲𝘆 𝗽𝗿𝗲𝗳𝗲𝗿 𝘁𝗼 𝗳𝗿𝗲𝗲𝘇𝗲 𝗮 𝗽𝗿𝗼𝗷𝗲𝗰𝘁 𝗶𝗻𝘀𝘁𝗲𝗮𝗱 𝗼𝗳 𝗹𝗮𝘂𝗻𝗰𝗵𝗶𝗻𝗴 𝗶𝘁 𝘄𝗶𝘁𝗵 𝗮 𝗿𝗲𝗱𝘂𝗰𝗲𝗱 𝗲𝘅𝗽𝗲𝗰𝘁𝗲𝗱 𝗺𝗮𝗿𝗴𝗶𝗻 (due to the strong increase of construction costs) …

🗞 ING published an interesting article on this theme. You will find below a few extracts:

“𝘜𝘚 𝘴𝘢𝘭𝘦𝘴 𝘰𝘧 𝘦𝘹𝘪𝘴𝘵𝘪𝘯𝘨 𝘩𝘰𝘮𝘦𝘴 𝘸𝘢𝘴 4,3 𝘮𝘯 𝘪𝘯 𝘔𝘢𝘺, 𝘸𝘩𝘪𝘤𝘩 𝘳𝘦𝘱𝘳𝘦𝘴𝘦𝘯𝘵 𝘢 𝘥𝘦𝘤𝘳𝘦𝘢𝘴𝘦 𝘰𝘧 20 % 𝘺𝘦𝘢𝘳-𝘰𝘷𝘦𝘳-𝘺𝘦𝘢𝘳 𝘸𝘪𝘵𝘩 𝘢 𝘮𝘦𝘥𝘪𝘢𝘯 𝘱𝘳𝘪𝘤𝘦 𝘥𝘰𝘸𝘯 3,1 % 𝘠𝘰𝘠.
𝘈𝘵 𝘵𝘩𝘦 𝘴𝘢𝘮𝘦 𝘵𝘪𝘮𝘦 𝘮𝘰𝘳𝘵𝘨𝘢𝘨𝘦 𝘢𝘱𝘱𝘭𝘪𝘤𝘢𝘵𝘪𝘰𝘯𝘴 𝘧𝘰𝘳 𝘩𝘰𝘮𝘦 𝘱𝘶𝘳𝘤𝘩𝘢𝘴𝘦 𝘢𝘳𝘦 50 % 𝘥𝘰𝘸𝘯 𝘧𝘳𝘰𝘮 𝘵𝘩𝘦 𝘱𝘦𝘢𝘬, 𝘣𝘶𝘵 𝘴𝘶𝘱𝘱𝘭𝘺 𝘰𝘧 𝘦𝘹𝘪𝘴𝘵𝘪𝘯𝘨 𝘩𝘰𝘮𝘦𝘴 𝘧𝘰𝘳 𝘴𝘢𝘭𝘦 𝘪𝘴 𝘥𝘦𝘤𝘳𝘦𝘢𝘴𝘪𝘯𝘨 𝘯𝘦𝘢𝘳𝘭𝘺 𝘢𝘴 𝘧𝘢𝘴𝘵.
𝘛𝘩𝘦 𝘤𝘰𝘮𝘣𝘪𝘯𝘢𝘵𝘪𝘰𝘯 𝘰𝘧 𝘸𝘦𝘢𝘬𝘦𝘳 𝘥𝘦𝘮𝘢𝘯𝘥 𝘢𝘯𝘥 𝘸𝘦𝘢𝘬 𝘴𝘶𝘱𝘱𝘭𝘺 𝘩𝘢𝘴 𝘤𝘭𝘦𝘢𝘳𝘭𝘺 𝘢𝘯 𝘪𝘮𝘱𝘢𝘤𝘵 𝘰𝘯 𝘵𝘩𝘦 𝘯𝘶𝘮𝘣𝘦𝘳 𝘰𝘧 𝘵𝘳𝘢𝘯𝘴𝘢𝘤𝘵𝘪𝘰𝘯𝘴, 𝘺𝘦𝘵 𝘪𝘯 𝘴𝘰𝘮𝘦 𝘭𝘰𝘤𝘢𝘭 𝘮𝘢𝘳𝘬𝘦𝘵𝘴, 𝘩𝘰𝘮𝘦𝘴 𝘤𝘰𝘯𝘵𝘪𝘯𝘶𝘦 𝘵𝘰 𝘴𝘦𝘭𝘭 𝘧𝘰𝘳 𝘢𝘣𝘰𝘷𝘦 𝘢𝘴𝘬𝘪𝘯𝘨 𝘱𝘳𝘪𝘤𝘦𝘴.
𝘞𝘪𝘵𝘩 𝘱𝘳𝘪𝘤𝘦𝘴 𝘯𝘰𝘵 𝘤𝘰𝘭𝘭𝘢𝘱𝘴𝘪𝘯𝘨 𝘢𝘴 𝘧𝘦𝘢𝘳𝘦𝘥, 𝘢𝘯𝘥 𝘪𝘯 𝘵𝘩𝘦 𝘤𝘰𝘯𝘵𝘦𝘹𝘵 𝘰𝘧 𝘢 𝘫𝘰𝘣 𝘮𝘢𝘳𝘬𝘦𝘵 𝘵𝘩𝘢𝘵 𝘳𝘦𝘮𝘢𝘪𝘯𝘴 𝘴𝘵𝘳𝘰𝘯𝘨, 𝘩𝘰𝘮𝘦 𝘣𝘶𝘪𝘭𝘥𝘦𝘳 𝘴𝘦𝘯𝘵𝘪𝘮𝘦𝘯𝘵 𝘢𝘯𝘥 𝘩𝘰𝘶𝘴𝘪𝘯𝘨 𝘴𝘵𝘢𝘳𝘵𝘴 𝘴𝘵𝘳𝘦𝘯𝘨𝘵𝘩𝘦𝘯 𝘢𝘨𝘢𝘪𝘯. 𝘈𝘴 𝘢 𝘳𝘦𝘴𝘶𝘭𝘵, 𝘳𝘦𝘴𝘪𝘥𝘦𝘯𝘵𝘪𝘢𝘭 𝘤𝘰𝘯𝘴𝘵𝘳𝘶𝘤𝘵𝘪𝘰𝘯 𝘴𝘩𝘰𝘶𝘭𝘥 𝘤𝘰𝘯𝘵𝘳𝘪𝘣𝘶𝘵𝘦 𝘱𝘰𝘴𝘪𝘵𝘪𝘷𝘦𝘭𝘺 𝘵𝘰 𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘤 𝘨𝘳𝘰𝘸𝘵𝘩 𝘰𝘷𝘦𝘳 𝘵𝘩𝘦 𝘯𝘦𝘹𝘵 𝘤𝘰𝘶𝘱𝘭𝘦 𝘰𝘧 𝘲𝘶𝘢𝘳𝘵𝘦𝘳𝘴, 𝘢𝘧𝘵𝘦𝘳 𝘩𝘢𝘷𝘪𝘯𝘨 𝘣𝘦𝘦𝘯 𝘢 𝘴𝘪𝘻𝘦𝘢𝘣𝘭𝘦 𝘥𝘳𝘢𝘨 𝘰𝘷𝘦𝘳 𝘵𝘩𝘦 𝘱𝘢𝘴𝘵 𝘺𝘦𝘢𝘳.“

At Ernest Partners we are there to help navigate this complex environment. Do not hesitate to reach out to us!