Luxury real estate a safe haven for investors

Investors worried about recession see luxury real estate as
a "valuable hedge against inflation", according to a new report.

Luxury real estate a safe haven for investors

Luxury real estate buying has been buoyant during the first half of 2022, which suggests that this type of investment is a haven for high-income families against inflation, which hit 8.9% in August. Everything indicates, therefore, that the demand for luxury homes will continue to rise, concludes a report by Christie’s International Real Estate.

In an analysis of luxury real estate, the international real estate network concludes that the market is at an “important point of maturation after an unprecedented year of 2021 and a very dynamic first half of 2022”, reads the publication. This means that two years after the initial shock of the pandemic, the premium real estate market will reach a moment of stabilisation and gradually return to “normal levels”, similar to 2019.

“In 2021, we had the highest turnover ever for the company and 2022 has been a very positive and dynamic year, with a sharp growth of 65% (in sales and leases) compared to last year, where sales have a special focus”, notes Rafael Ascenso, general director of Porta da Frente Christie's, the brand's representative in the Greater Lisbon and Alentejo regions, quoted in the document.

Growing demand

The demand for high-end properties is growing. And “the number of real estate transactions in the mid-high and high segment in the first half of the year proved that investing in so-called 'hard assets' can be one of the best options against inflation”, say experts from Christie's International Real Estate. This is because many high income and wealthy families are now concerned about the possibility of a short-term recession and see the residential real estate sector as a “fundamental safeguard”, a “valuable hedge against inflation”.

“For those who have savings available today, there is no better solution than withdrawing money from the bank and investing in real estate. Let's imagine an investor or family with one million euros available, with an inflation of 7%, will lose 5,000 euros per month if they don't invest this amount in a profitable asset. The same happens with foreigners who have the same problem of inflation and who find in Portugal a mature real estate market at a much lower price than their countries of origin”, adds Rafael Ascenso.


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