In recent years, the housing sector has gone through many situations. From the mortgage crisis to the economic recession to the current inflationary and rising interest rate environment, the real estate market has become more competitive than ever. One of the current debates in the residential business is the need to promote more affordable housing, although it is a “complicated” challenge. “Now the context is not favorable for affordable housing, we have lost a golden opportunity to do it,” he explained. Juan Manuel Acosta, director for southern Europe at Greystarexplained the manager in the talks organized by IESE “Real Estate: winning strategies in uncertain times”.
“You have to skew what is happening in the capital market with the economy. The rise in rates is dramatic in its speed. This means very expensive financing and this means that any type of affordable initiative is relegated due to its pressure. From an objective point of view, this is not a good time to build affordable housing. It is clear that it is necessary, it is necessary, but it will be very, very difficult”, added the manager.
Following the hypothesis presented by the Greystar manager, Carolina Roca, president of Asprima, explains that “we had a bond in place to start an affordable Build-to-rent industry. Now it will be necessary to take more important measures to convince these funds to invest in this type of housing”.
“But it is also true that 80% of the production of affordable housing has been destined for sale. And the problem is that they have wanted to focus on affordable rental housing in recent years, and there has not been any progress on rental housing and the other has been left aside, ”explains Roca.
forecasts and trends
In order to stay competitive in this new climate of uncertainty, investors and companies in the sector have had to devise innovative strategies. This has led to interesting and forward-thinking housing trends, especially when it comes to residential real estate.
According to the president of Aprima, the residential developer sector, despite the macro indicators that call for prudence, considers that it will not be greatly affected. “We have been underproducing for 12 years housing and there is a real imbalance between supply and demand. Although there is a retraction in demand (even with falls of 20%), we come from a record 2022. These falls take us to 500,000 transactions, which is a healthy number”, says Roca.
According to Jorge Morán, vice president of La Finca and Castellana Properties, “’real estate’ is not quantum physics: it is a cyclical industry and requires specialisation”. “The coming cycle is not good. You have to work on it and take action. As in all crises, what will save real estate is specialization ”, he concludes.
