2023-08-08 05:22:16
Published on August 08, 2023 at 07:22. Modified on August 08, 2023 at 07:26.
The real estate market does not like interest rate hikes. For at least two reasons: on the one hand they reduce the ability to borrow, and therefore to acquire, on the other hand they lead to a devaluation of goods which is detrimental to sellers. These two factors put downward pressure on the entire asset class, which is passed on much more quickly to the real estate stocks managed by the listed funds than by the market. Sellers tend to wait, except in an emergency, for more favorable conditions. The funds themselves have no choice but to sell in order to meet the capital repayment deadlines. More reactive on the downside, they are also on the upside. A pause in monetary tightening could therefore very quickly lead to a trend reversal.
“The current period is one of the best I have known in decades during my long career to exploit the real estate market, indirect in particular”, confesses Ingo Bofinger, member of the board of directors of the manager of the Zurich fund Avadis. The expert calls on investors to “take advantage of the momentum given by the fall in the value of capital resulting from the new interest and inflation rates”.
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