The inflation in the United States reached a historical record. It is a fact. Novelty that reverberates throughout the world and of course, in Argentina. To put us in context, annualized inflation in the United States registered its highest level in more than 40 years. The American Government attributes the rise in fuel and food prices to the war in Ukraine already sanctions against Russia. The American central bank (fed) raised its benchmark interest rates by half a percentage point last month, the first increase of this magnitude since 2000, to try to control record inflation, and signaled that further hikes “will be justified” to future.
In this global context, it is understood that the few assets to protect the value of the currency are in crisis. So, faced with this scenario, the market trend is first to stabilize the personal economy and then to try to ensure that the remaining currency does not lose its value. This is achieved acquiring assets that beat inflation.
Undoubtedly, the economic scenario of the United States works in favor for those who decide to invest in properties. Not only because investing in bricks has always been a safe bet, but also because the effect of inflation on the North American economy will cause the value of properties to increase, which will add to the upward trend that the sector has been showing for years in relation to property prices.
What does it mean that the FED Has the rate gone up? In simple terms, it means that the safest instrument to invest in the world, which are the United States treasury bonds, rose by an average that currently places them close to 3% per year. Several real estate developers are proposing assets that are exceeding that percentage. The estimated capitalization in each project ranges from 10% to 15% per year in dollars. Therefore, being a safe investment, you would be earning that additional % to what is currently quoted by the USTreasury Bills.
By Fernando Bustos, Commercial Director Vizora Real Estate Developments.
by Fernando Bustos