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Everything you need to know is included in our Belarus Property Pack
Are you considering buying real estate in the land of Miracles? Are you unsure when would be the best time to proceed?
People hold diverse opinions regarding market timing. The Belarusian real estate agent you consulted might advise you to buy property now, whereas your relative who actually lives in Minsk may suggest waiting for more favorable market conditions.
At Investropa, when we create articles or update our pack of documents related to the real estate market in Belarus, we base our work on reliable data and statistics, rather than relying on subjective opinions or hearsay.
After thoroughly analyzing official reports and statistics available on government websites, we have gathered solid information in a database. Here are our findings that can assist you in determining whether it's the right time to invest in real estate in Belarus.
Have a nice read!
How is the property market in Belarus now?
Belarus is, today, a relatively stable country
Neutral
Stability should be the first thing you look at when you want to invest in real estate because it reduces risks and provides a secure investment landscape. It is an information you need as a foreigner buying a property in Belarus.
In today's context, Belarus can be regarded as a country that has achieved stability to some extent. The last Fragile State Index reported for this country is 68.7, which is a respectable number.
Belarus has a strong central government that has been able to effectively manage the country's economy and maintain a relatively high degree of political stability over the years. Additionally, its close ties with Russia have provided a buffer against external threats and allowed it to maintain its independence and sovereignty.
Let's analyze other data now to assess whether it's a favorable time to purchase property in this country.
Belarus will struggle to achieve growth
Neutral
Before investing in properties, check if the country's economy is strong enough.
As projected by the IMF, Belarus is likely to finish 2023 with a growth rate of 0.7%, which is somewhat disappointing. As for 2024, the experts say 1.2%.
Unfortunately, an explosive growth is not on the horizon since Belarus's economy is expected to increase by 4.7% during the next 5 years, resulting in an average GDP growth rate of 0.9%.
The minimal growth rate in Belarus can be challenging for investors because it means that property prices may not increase significantly over time, making it difficult to make a profit from the investment. Additionally, the minimal growth rate could lead to a decrease in property values, meaning that there is a risk of losing money when investing in a property in Belarus.
That being said, there are other indicators to monitor.
Belarus' population is getting (a bit) richer
Positive
Take population growth and GDP per capita into consideration before you decide to invest in real estate because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Belarus, the average GDP per capita has changed by 0.8% over the last 5 years. It's not much, but the growth is here.
This means that, if you purchase a centrally located apartment in Minsk and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, there might be a rise in rental demand in Belarusian cities like Minsk, Brest, or Grodno in 2024.
Rental yields are average in Belarus
Neutral
Now, let's shift our focus to the rental yield.
It's the annual rental income of a property divided by its price. For example, if a property in Belarus is purchased for 500,000 BYN and generates 20,000 BYN in annual rental income, the rental yield would be 4%.
According to Numbeo, rental properties in Belarus offer gross rental yields ranging from 3.0% and 5.7%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Belarus.
It means that your income potential is relatively moderate.
Everything you need to know is included in our Belarus Property Pack
In Belarus, inflation is expected to strengthen significantly
Positive
In two words, inflation is when prices soar.
It's when your customary bowl of draniki costs 10 Belarusian rubles instead of 8 Belarusian rubles a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, potentially leading to capital appreciation.
- Inflation can result in higher rental rates, increasing the property's cash flow.
- Inflation decreases the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, helping preserve the investment's value.
- Diversifying into real estate provides stability during periods of inflation.
As indicated by IMF projections, over the next 5 years, Belarus will have an inflation rate of 35.0%, which gives us an average yearly increase of 7.0%.
It means that Belarus will most likely face pronounced inflation. In such a scenario, if you make a purchase now, there is a possibility that the value of the property could appreciate over time, enabling you to sell it at a higher price and yield a profit.
Is it a good time to buy real estate in Belarus then?
Time to conclude !
Considering the prevailing circumstances, 2024 might not be the most favorable time for property investment in Belarus, given a range of concerning signals. Despite a somewhat improved financial status among its population, other factors raise caution. The anticipated strengthening of inflation could lead to decreased purchasing power, potentially affecting the real estate market and overall investment appeal.
While Belarus currently experiences relative stability, this factor alone may not be sufficient to outweigh the potential downsides. The country's struggle to achieve substantial economic growth poses a significant concern. Limited economic expansion could impact property demand and subsequently influence property prices, potentially leading to a lack of appreciation in value for real estate investments.
Another key consideration is the average rental yields in Belarus. These yields may not offer the desired return on investment that potential property buyers seek. Coupled with the potential challenges posed by inflation and economic stagnation, this could dampen the overall attractiveness of the property market for investors.
In conclusion, the combination of signals in Belarus suggests that 2024 might not be the most opportune time for property investment. While some favorable and neutral factors exist, the potential impacts of strengthening inflation, limited growth prospects, and average rental yields warrant careful consideration and a cautious approach for those contemplating property purchases in the country.
We sincerely hope this article has provided you with beneficial information!. If you need to know more, you can check our our pack of documents related to the real estate market in Belarus.
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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
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