If the income of a potential home buyer is stable and banks are ready to grant a mortgage loan, it would be worth buying a home now and not rely on a possible higher price reduction in the future, says Aigars Šmits, Chairman of the Board of Arco Real Estate.
“This is a deeply philosophical question. We have always said that property should be bought when you need it. If you ask me – would I buy a home now for myself and my family, if I am in a favorable situation, my income is stable and I am in a category where Because we now see that developers in new projects often offer stock prices and various short sales, if someone thinks that they will wait now and prices will fall significantly, then I would not rely on it at all, because “It’s not that prices have been” crazy in space, “
He explained that when selling the new project for 1600 euros per square meter, it should be remembered that the price includes value added tax. The real income for the developer is 1320 euros per square meter, while construction costs for new projects are about 1000-1100 euros per square meter. If the purchase of land, design and other costs are added, then the developer has virtually no profit and they are on the verge of survival, Schmidt said.
“If we compare it with the crisis of 2007, when everything was financed, then now there are countable developers on the market who are building new projects, so I do not see that there is any reason to expect anything in the hope that prices will fall. “To see how the economy as a whole recovers. If I had to choose between paying rent and spending extra money now, I would definitely buy my property and invest in it,” said Schmidt.
The expert pointed out that the purchase of real estate must be evaluated in the long run, prices can be adjusted both up and down, but the profit is fixed at the moment when the property is sold.
“If a person has bought a property for living for, for example, 1000 euros per square meter and if the price at some point rises to 1600 euros, then why he does not sell the house, but can earn well. On the other hand, if the apartment is bought for 1600 euros per square meter “Due to the economic correlation, the price drops to 1,400 euros, then the person starts to stress and the end of the world is here. No, we have to wait, because the price will rise again at some point.
Asked if developers are actively offering various special offers and promotions at this time, given that the market has stalled a bit, Schmitt said it could be, but he would not want to speculate on it.
“If a person has found an apartment of interest in the new project, then while waiting for a promotion or special offer, he can simply miss the property. The developer can always decide to sell or not sell the property at the price offered by the buyer. There is a free market, prices are not set in stone. , “added Schmidt.
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