thought leadership by Christian Nesheim Founder and Editor Investment Migration Insider
IN THE SHORT AND LONG TERM, WILL THE CORONAVIRUS PANDEMIC MAKE INVESTING IN REAL ESTATE MORE ATTRACTIVE?
The short answer is ‘probably’.
he long answer: In the last month, I’ve probably had 60-70 conversations with investment migration professionals from – literally – every continent except Antarctica, including with Residence and Citizenship by Investment (RCBI) advisors, developers, and programme officials. All these chats give me data points that I use to form a global snapshot of the way the pandemic is affecting the investment migration market. Almost unanimously, the citizenship/residence consultants I speak to say they are getting way more phone calls and emails than what’s normal for this time of year, even from what we think of as “first-world” countries with good passports. People everywhere are anxious, and many have seen their visafreedoms severely restricted, a phenomenon they never expected to see and one that is totally new to them. People who were on the fence are not on the fence any longer. So the demand is definitely still there. At the same time, many applicants are pulling out. Notably, those prospective applicants who had significant exposure to equities. They are not as rich as they were before and many are perilously illiquid. Applicants in this category are telling themselves that now isn’t the time to be spending money. Other investors, however, are putting their golden visa plans on the backburner, not over a lack of cash but because they anticipate bargains in the months to come and don’t want to buy at the peak of the market. This is probably a prudent move. But even in the face of what will surely be a global recession, a drop in the nominal prices of housing isn’t a foregone conclusion. In an economic downturn, all else being equal, property prices should fall as large segments of the population have less money to spend due to loss of income and a fall in the value of portfolios. Worsening economic prospects, in brief, puts downward pressure on the value of almost all kinds of assets that are not “haven” assets, like treasuries. But all else is not equal. During the crisis, central banks around the world have essentially committed to printing unlimited amounts of fiat
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THE CITIZEN
