Real estate has emerged as a safe haven for investments even in the midst of a crisis and other market volatilities.
As evident in the last two years during the pandemic, certain segments of real estate stood out for their resiliency, providing investors with a sound opportunity to create, build and accumulate wealth primarily through passive income via leasing, and capital appreciation, as values and returns are most certain to increase in the long run.
Essentially, real estate offers investors a tangible asset, a better diversified portfolio, and a strong inflation hedge that protects their investments from losing value over time.
Patrick Grimes, founder of private equity firm Invest on Main Street, explained in an article for forbes.com how “investing in income-generating real estate can help you hedge your bets against inflation and protect your retirement dollars long-term.”
Investment fund manager Equiton Capital Inc. similarly noted in an article on its website that a “properly diversified investment portfolio includes hedges to protect against market swings caused by rapid inflation. Residential real estate, which demonstrably appreciates faster than inflation, provides the perfect fit.”
Locally, this is proving to be the case as well, with financial experts pointing out how property prices are rising faster than the consumer price index on a yearly average. Amid the pandemic, local property prices have held—even increased—over the past two years.
Data from Bangko Sentral ng Pilipinas’ Residential Real Estate Price Index showed that nationwide residential property prices rose by 5.6 percent in the first quarter compared to the same period a year ago. In Metro Manila, residential property prices rose higher at 9.5 percent, driven primarily by increases in the prices of condominium units and townhouses.
While real estate indeed presents a potentially lucrative opportunity to build wealth, there is, however, a need to be conscientious and prudent. You need to check location, features, and track record, among others, to ensure you are making the right choice.
Read more: Philippine Daily Inquirer Online – News