After the elections, the conservative party led by Boris Johnson has a definite majority in UK’s parliament and Brexit will probably happen in the very near future. Now investors are wondering: “How would Brexit affect UK’s real estate prices and the economy”. We talked to Eitan Eldar, real estate expert, to see what he predicts for the real estate market in 2020 and to hear his advice.
The UK economy hasn’t seen it’s greatest year in 2019, to say the least. Uncertainty about Brexit and an unstable global economy have taken their toll on the rate of growth of the British economy. As a matter of fact, there has been no growth in the last quarter of 2019 according to the data.
“UK’s economy has been disturbed by politics and uncertainty”, said Eitan Eldar, “But now after the elections, I believe we are going to see a major shift, we are going to see a full recovery and new growth in GDP”.
Although Brexit had a major influence on the country, there was also a lot of global economic ‘turbulence’ for the past few years. Many countries in the EU have had difficulties and some, like Greece, had a major crisis. Yet the British economy is still considered very resilient.
UK Real Estate Market
“Now that there is more certainty, the ‘climate’ is more suitable for investors”, said Eldar. The business-friendly conservative party is expected to make it easier for investors, in order to rejuvenate the British economy. And there is already a breeze of optimism in the air.
“The demand for commercial real estate is very high right now”, said Eitan Eldar, “There is a rise in investor’s interest towards those type of assets because they get a great return on investment”.
But economists are also projecting a rise in demand for residential and industrial real estate, after years of declining prices. “There is logic behind these assumptions, that leaving the EU will encourage these type of investments”, said Eitan Eldar, “Residential real estate prices go up when there is demand but also optimism in the market, which we now have”.
2020 is expected to be a strong year for the British economy, yet only time will tell the true effects of Brexit on real estate and the economy in general, yet the departure from the EU opens new possibilities for trade deals that are more beneficial to the UK.