In a phase in which interest rate increases and the reduction in the value of properties are constant, investors, at all levels, have begun to reflect on what real estate investments are. But to refute these doubts there are market data, which demonstrate how focusing on the purchase of the brick is still a valid and justified action. This is because real estate investments represent an alternative in a portfolio in terms of efficiency, diversification and exposure to megatrends and which also impact – and this benefits the community and not just those who purchase – the modernization of cities and the fight to climate change.
It is the global indices on different classes that determine this advantage and which corroborate the theory according to which investing in real estate can still be advantageous with a better risk/return ratio. This is based on an average annual performance of 7.8% over the last 10 years and a volatility of 3%. By purchasing buildings, houses or, in any case, properties of any type, you also protect yourself from inflation. If we observe the real returns generated in markets with rent indexation, it is clear that the “holding” period in the portfolio, in order to outperform inflation, is much shorter than that of shares (5 years versus 11). And also at the level of portfolio diversification, as mentioned, there are various advantages. Especially in the long term, offering investors support to improve the risk profile of the portfolio’s return. This is also because, within the real estate sector, there are segments with very different characteristics.
In particular, residential and healthcare boast structural and non-cyclical demand. Not secondary is the aspect of digitalisation which, inevitably, has entered the real estate sector in a predominant manner, helping and encouraging the development of this market, especially the luxury one, since it allows (and will do so in an increasingly accurate and precise way) to be able to evaluate a property in detail from any part of the world (thanks, for example, to virtual reality), without the need to move and speeding up the choice of a possible purchase.
