Connect with us

Economy

Buy or Rent? Find out which solution is the best in the high-priced market

Published

on

Buy or Rent?  Find out which solution is the best in the high-priced market

Buy or rent a house? The answer is not easy, given the prices that are currently practiced in the real estate market, especially in large cities. And even with the pandemic, the sector showed no decline in value.

And the numbers speak for themselves. The cost at which banks assess real estate for the issuance of a mortgage will be disclosed this week, but in June it was 1215 euros per square meter. This is three euros more than in the previous month.

According to the latest figures from the National Institute of Statistics (INE), the largest increase compared to May was observed in the Algarve (1%). In the opposite direction, the Alentejo recorded the steepest drop (-1%), also compared to May. In the annual comparison, it is in the Lisbon metropolitan area that the “most intense” spread of 7.7% can be seen.

It is true that the value of banks’ valuations has been increasing since October 2020, after slowing down between June and September 2020. Apartments are still rated higher by banks than houses.

In addition, prices in the rental market have not improved much and the news is not encouraging for 2022. The July inflation rate set by the National Institute of Statistics (INE) was 1.5%, indicating a predictable increase for non-owners. However, according to a study by idealista, home rental prices in Portugal fell 4.7% in one year, that is, from July 2021 to the same month last year. According to the idealista price index, at the end of July this year, the cost of renting a house was 10.9 euros per square meter. In relation to the quarterly variation, the decline was -0.7%.

And while the figures vary from region to region, there is a common feature: at the end of the month, even after taking into account the costs of taxes, insurance, commissions and interest associated with bank loans, renting is always worth more than buying.

See also  The fight between Nose and Altis also plays on innovation - Telecommunications

Along with value, there is also a psychological problem. Many Portuguese value the safety of the purchase: after the conclusion of the loan agreement, there is a guarantee that the house will pass into their hands. With regard to lease agreements, despite the right to renew, the landlord may one day ask the tenant to leave. What’s more, no matter how much rent you pay, you will never own real estate.

There are still other factors to consider. For example, renting can be ideal for those just starting out, wanting to leave their parental home, or have no income to buy. Mobility is also mentioned as one of the benefits of this option. In other words, it allows you to easily move to another home, given the length of the contracts, and you don’t have to wait for a good deal to sell, as is the case with landlords.

There are other criteria that need to be considered in order to make the best decision. In the case of a lease, you need to pay a monthly rent – initially you will need to pay the rent as an advance, which serves as a guarantee – and the cost of the work, depending on what is agreed with the landlord. In the case of purchases, you will in most cases have to resort to a bank loan, and usually financial institutions do not provide loans for the full purchase or assessed value.

For those with money to spare, buying a second home can be seen as a good investment alternative over traditional savings products. This trend is fueled by interest rates on deposits and other types of savings products, which are not very attractive, which gives rise to the need to look for other options.

See also  Musk may donate $ 6 billion to end world hunger

Rent. Rights and obligations of both parties

Are tenants required to pay the costs of the condominium? They will only need to pay the rent – renewed every year. Costs such as condominium fees and renovations are the responsibility of the landlord. But there may be exceptions in the signed contract.

The tenant wants to leave the house. Is it possible to terminate the contract early? This is provided that the contract has expired at least six months. You must also give the landlord 120 days in advance. If you leave early, you will have to pay the rent corresponding to the missing notice period.

What are the responsibilities of the owner? He must carry out the necessary maintenance work, unless otherwise specified in the contract.

Can the lease be transferred to another person? The lease continues after the death of the tenant, and this situation must be reported to the landlord by registered mail and with a notice of receipt. Failure to communicate compels the eligible transferee to reimburse the landlord for losses incurred as a result of the omission. In the event of a divorce or separation of persons and property, if the lease concerns the family home, its destination can be determined by agreement between the spouses or in court.

How long does the contract last? The parties can agree on a fixed period or indicate that it has an indefinite period. If nothing is said about this, the contract is considered valid for an indefinite period.

Purchase. Care when choosing a loan

See also  Airbus kidnaps one of Boeing's major customers in Europe and sells 100 KLM aircraft

What precautions should you take when choosing a bank? First, you must contact your bank: defend your position and negotiate. You also have to run multiple simulations for different time frames. Always consider financing terms, fees, insurance and legal taxes. In addition to simulating the 1% and 2% interest rate increases, also ask for the calculations for the 3 or 4% interest rate increases. This way you will get an idea of ​​the worst-case scenario. If you find that the cost of supporting the payment is significant, run a new simulation for a longer period. However, the longer the term, the more expensive the loan.

What are the main costs? Expect a range of upfront payments that vary from bank to bank. This is the case for review committees or scrutiny and opening meetings (terminology varies). These fees often include an appraisal fee. The bank always requires a report with an appraisal of the property carried out by a technician. You can also expect to pay Municipal Property Tax (IMI) and Onerous Property Transfer Tax (IMT). Other costs to consider relate to the work of a lawyer, which is often provided by banks, such as bureaucratic procedures in the Land Register, the Financial Service and notary offices, among others.

What kind of insurance is required? You need to take out life insurance, which includes death or disability insurance, with capital equal to the amount of the loan to ensure that the debt is paid off if the owner becomes disabled or dies. You also need home insurance against multiple risks.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Economy

Fasten your seat belts well. Volatility persists on Wall Street – Stock Exchange

Published

on

Fasten your seat belts well.  Volatility persists on Wall Street - Stock Exchange

Stocks on the other side of the Atlantic have experienced another day of high emotions, a real roller coaster, to the point where CNN Business said “investors better tighten their belts because there is no sign of an end to Wall Street volatility.” .

The Dow Jones industrial index fell 0.19% to 34,297.73 points. Remember, on January 5th it reached a level that was not there before, 36,952.65 points.

The Dow Jones index was losing ground in the sell-off move that was seen for most of the session, but in the last hour of trading it managed to turn around, as it did yesterday. However, in the last stretch, he again caught his breath, and he returned to negative terrain.

Johnson & Johnson and American Express, which are the two components of the Dow, fared well after delivering good “forecasts” in their keynote presentations that helped revitalize the index, but not enough to keep it afloat.

The Standard & Poor’s 500 closed down 1.22% at 4356.45. Its all-time high was reached in intraday trading on January 4 at 4818.62 points.

On the other hand, the technology index Nasdaq Composite, which is in the correction zone, depreciated by 2.28% and stopped at 13,539.30 points. The Nasdaq’s all-time high is 16,212.23 points, set on November 22.

Contributing to strong volatility was a two-day Fed meeting that kept investors waiting. Tomorrow at 19:00 in Lisbon, instructions on the monetary policy of the Central Bank will be given, but everything still indicates that the Fed will start raising the key rate in March.

See also  Peloton cuts prices by making people stay at home

Investors are also attentive to the presentation of technology accounts. After Netflix on Thursday and IBM this week, it will be Microsoft’s turn today to publish its results after the stock markets close. Tesla follows tomorrow and Apple on Thursday.

Maybe a new rally

Pains and Capital, in a research note that Negosios had access to, indicated yesterday that the sell-off registered last week caused the S&P 500 to lose the equivalent of six months of gains.

“The big question for investors this week is: Where do we go next? First, the market is deeply oversold. The S&P 500 is showing the lowest Relative Strength Index (RSI) reading since the March 2020 crash. However, the market is as oversold as and during the first wave of the global pandemic,” said Graham Summers, chief strategist at Phoenix Capital Management, in the aforementioned “research” by Gains Pains Capital.

“This suggests a bounce is expected. It is highly unlikely that stocks will continue to fall from now on. Instead, we may have a rally after the Fed meeting on Wednesday. extra “foam” from the markets,” he added.

Near debut for the S&P 500

On Tuesday, the S&P 500 reversed its negative trend and entered a bullish field, and if it maintained a positive trend until the close, that would be a feat.

According to Bloomberg data dating back to the early 1980s, the S&P 500 never dropped at least 2% from the previous session for two consecutive sessions before ending up positive. And today was supposed to happen.

See also  Hoti wants a new 109-room hotel in Braga and two Meliá hotels in Viana and Famalican.

Another interesting statistic is that only eight times – on two consecutive days – did the index fall 1% during intraday trading and then close higher: three times in 2002, three times in 2008-2009 (during global financial crisis), once in 2015. and one in 2020.

“Buy dip”

One of the reasons for the retracement throughout the session and even into the close (just like yesterday) is the fact that many investors take advantage of the dip to buy – so-called “buying the dip”.

“Stock buyers have resurfaced to take advantage of shares at a bargain price after a sell-off sparked by fears of a tougher Fed stance and a Russian military buildup on the border with Ukraine,” Bloomberg notes.

Continue Reading

Economy

Broken recovery and high inflation: this will be the year 2022, according to the IMF

Published

on

Broken recovery and high inflation: this will be the year 2022, according to the IMF

The recovery of the economy from the crisis caused by the pandemic will slow down in 2022, according to the forecasts of the International Monetary Fund (IMF), published on Tuesday in Washington. Annual global growth will slow from 5.9% in 2021—the highest level since 1973—to 4.4% in 2022 and 3.8% in 2023, a more optimistic trajectory than that recently proposed by the World bank.

The progressive slowdown is due to a “glut of growing cases” that pile up without resolution and exacerbate disparities in the pace of economic recovery in various parts of the world, fueling rising inflation in all major cities. especially the US — and disruptions in global supply chains forcing governments to start tightening fiscal policy to deal with record global public debt close to 100% of global GDP. To all this “burden”, the IMF adds growing geopolitical tensions (especially in Eastern Europe and the Asia-Pacific region), a gap in covid vaccinations (only 4% in poor countries) and a high probability of a multiplication of natural disasters due to climate. change.

Undermining the global economy

It is therefore not surprising that the IMF document released on Tuesday bears the ambiguous title “Hull Overload, Discontinuous Recovery and High Inflation”. Also, in a pessimistic tone, the speech of the Fund’s chief economist, and since last week, the first deputy general director, Gita Gopinath, was published. “Destroyed World Economy”named number two by Kristalina Georgieva in an article she published on the institution’s blog summarizing global trends.

As a result of this “overload” of growing and persistent problems, IMF economists cut growth forecasts for the world and the seven largest economies.compared to what they advanced in the World Economic Outlook (WEO) last October. This January publication is a limited interim update for large countries only, not including forecasts for small and medium-sized countries such as Portugal, which will not be published until April when the new full edition of the WEO is released.

Among the scissors, the highest cuts in growth Brazil (which is decelerating sharply, from 4.7% in 2021 to 0.3% in 2022, already close to stagnation), USA and Mexicoand more moderate for Germany, Canada, China and Spain.

See also  BCP pays 1.84% per annum on 500 million social bonds. Demand increased by 1.5 times - Markets

Some good news for Portugal

Despite lower forecasts, the global dynamics this year will be marked by strong divergence in growth rates.

According to the IMF, the ten largest economies will accelerate in 2022: Germany, Saudi Arabia, the five members of ASEAN (Association of Southeast Asian Nations), Spain, India (which turned out to be the largest economy with the highest growth rates). surpassing China) and Japan. The acceleration in Germany and Spain is good news for Portugal, which has these countries among its main export destinations.

On the contrary, there are 10 other major countries that have slowed down this year: South Africa, Brazil (the most dramatic case since the austerity introduced in 2021 by Economy Minister Paulo Guedes and consecutive interest rate hikes by the Brazilian Central Bank), China. (whose growth will almost halve and remain below 5%), the US, France, Italy, Mexico, the UK, Russia and the eurozone as a whole (slowing down from 5.2% in 2021 to 3.9% in 2022). Some of these countries are Portugal’s export destinations and these forecasts are a warning.

But these forecasts may have to be revised again in April or summer. There are problems that could get worse, the IMF quotes: the development of the pandemic; how China will deal with the real estate crisis and the disruption caused by the zero covid policy; multiplication of natural disasters; the growth of popular uprisings against the high cost of living; and exacerbation of geopolitical tensionswith the rise of Russia and China.

Inflation does not leave us, but next year it will decrease

Restrictions spurring consumer price growth will not ease in 2022. On the contrary, according to the IMF forecast, the surge in inflation will continue this year, and next year there will be only signs of a slowdown.

Some of the components that put the most pressure on the consumer price index, according to the forecasts of the Fund’s economists, will continue to grow: the average price of a barrel of oil of various grades will rise by 12%, the price of natural gas will rise by 58%, and the price of food raw materials will rise by another 4.5%.

See also  Microsoft named the best company in the world in 2021 • Eurogamer.pt

As a result of these price developments, forecasts point to an increase in US annual inflation from 5.3% (highest since 1990) last year to 5.9% this year (new high since 1982). Although at lower levels, a similar trajectory is expected for the eurozone, from 2.6% last year to 3% this year, the highest since 2011. In the case of emerging market and developing countries, the average annual rate will increase from 5.7%. up 5.9% over this period.

Anyway, inflation surge in 2023 slows down, proving to be “short-term”, although the IMF document does not use the word banned in official communications by many central banks. In the euro area, the forecast points to a decline in inflation in 2023 to 1.7%, which is slightly below even the forecasts (1.8%) presented by the European Central Bank (ECB) in support of the strategy approved and confirmed by President Christine Lagarde. ECB. In the US, inflation will fall to 2.7%, still above the Federal Reserve’s target (which wants to control prices at around 2%). In emerging and developing markets, it will decrease from 5.9% in 2022 to 4.7% in 2023.

Monetary tightening hurts: IMF recommends debt restructuring for the most vulnerable

This year, the IMF does not propose a single recipe, emphasizing the diversity of situations and the recommendation that “policies should be adapted to specific circumstances.” Kristalina Georgieva, CEO of the Fund, has already put forward this orientation in a debate held at the World Economic Forum conference in Davos this month. However, he cannot fail to highlight two central trends that will intensify in 2022: greater monetary and fiscal tightening.

Monetary tightening began last year when 50 central banks, mostly in emerging market and developing economies, raised interest rates.followed by some major central banks such as the Bank of England. Interest rate increases are expected to take first place this year. in several banks in developed countries, starting with the US Federal Reserve System (FRS), and that asset purchase programs have been discontinued in whole or in part, with the exception of Japan (which will deal with inflation around 1%). China has also shown itself to be opposed to monetary tightening, but the IMF will release an analysis of the Chinese economy on Thursday after the institution’s latest Article IV visit (allowing for this regular analysis).

See also  Banco BCP admits to resorting to collective layoffs

The tightening by the Fed will have global consequences, the IMF warns. The way the Fed communicates the removal of stimulus will or will not allow a correction to a greater or lesser extent. “ordered” in the markets,” said Geeta Gopinath at a press conference following the publication of the forecasts. A correction in some markets is expected or already underway, and some “are seeing high levels of exuberance,” Gopinath added.

“All countries must prepare for tightening financial conditions” and, in particular, emerging market and emerging market countries with more dollar debt will face “shocks,” the IMF document said. The fund advises them to try to negotiate (extend) maturities or even seek international support to restructure their debts. The IMF is calling on the G20 and private lenders to impose a debt moratorium on the 60% of the lowest-income countries that are already at risk of maximum stress.

On the budget side, government accounts will once again be “under pressure in the coming months and years” and governments should once again be “committed to demonstrating a medium-term plan that guarantees a path to debt sustainability,” the Fund advises. Brazil was the pioneer of austerity in 2021, and the award was received by Economy Minister Paulo Guedes during a debate held in Davos, where he stressed that he hoped to lock in a budget surplus in 2021 and that the Central Bank raised the Selic interest rate. several times. The next result, if the IMF forecasts come true, is a sharp decline in growth in 2022, approaching stagnation. Growth will accelerate next year, but only to 1.6%.

Continue Reading

Economy

Landlords must report rent by the end of the month. Set this and other IRS dates until the declaration is delivered

Published

on

Landlords must report rent by the end of the month.  Set this and other IRS dates until the declaration is delivered

UNTIL THE END OF THE MONTH

CLAIM INCOME

Landlords who are exempt and have not chosen to issue electronic rent receipts must submit a Model 44 return to the Finance Department via the Internet by the end of this month – Sunday 30th. delivered to the department by the following Friday.

And who are these taxpayers who are exempt from electronic income receipts?

These are owners who do not have and are not required to have an e-mail box and who did not receive more than 877,622 euros of rent (double the social support index) in 2021. These two conditions are combined.

Landlords who were 65 years of age or older on December 31, 2021, and taxpayers who receive rent under agreements covered by the Rural Lease Scheme, are also exempt.

UNTIL 15 FEBRUARY

˂ Consult and update your personal page on the Financial Portal with your family composition and other relevant personal items, such as the email address or NIB to which the state should transfer the IRS refund.

˂ Indicate spending on education and training in the interior of the country or in the autonomous region. You can deduct 40% of these fees up to a limit of one thousand euros, and the rent paid for the maintenance of a relocated student is not more than 300 euros.

˂ Tell the finance department about the rent for permanent housing if you have moved to the hinterland. You can deduct up to one thousand euros in the IRS instead of the usual 502 euros.

See also  Hoti wants a new 109-room hotel in Braga and two Meliá hotels in Viana and Famalican.

˂ Consider the duration of long-term permanent housing leases (contracts of up to two years or more), as well as the termination of such contracts. This type of lease benefits from lower tax rates, which decrease in proportion to the number of years the property is occupied, as agreed with the tenant. This is done through the financial portal.

UNTIL 25 FEBRUARY

CHECK BILLS

It is time to check or report, if your e-invoice portal personal account is not displayed in your personal account, invoices for expenses incurred in 2021. Based on these expenses, the IRS calculates a withholding from the IRS Fee, which reduces the weight of the invoice and increases the government’s possible refund. Thus, in addition to promoting a fairer tax system, the IRS is cutting costs when requesting an invoice with a taxpayer number for education and training, health care, and housing expenses.

There is also a discount related to general family expenses, which includes any fees, up to a deduction limit of €250 per taxpayer (€335 for single parent families). Maintenance payments determined by the court must also be indicated in the declaration according to model 3, since 20% of their total amount can be deducted from the tax. Don’t forget to request an invoice in certain areas of activity corresponding to the percentage of VAT paid in your pocket: 15% for car and motorcycle repairs, accommodation and meals, hairdressing, veterinary activities and gyms and 100% for expenses. with monthly passes for public transport.

Finally, keep in mind that there is a general limit to the set of tax deductions and benefits that follows from the mathematical formula. It varies by household income, the higher the lower the ceiling. Families with three or more children are eligible for an increase in the limit.

See also  Musk may donate $ 6 billion to end world hunger

FROM APRIL TO JUNE 30

Open an IRS campaign. It is not recommended to send or confirm the data, if they are subject to automatic declaration, during the first 15 days of the period, since, as a rule, it is during this period that the technical services detect possible errors in the system and correct them. You will not be affected in terms of calculating your tax, but you may be penalized with an increase in the time it takes to settle your return and the corresponding tax refund, if applicable.

Continue Reading

Trending