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

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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.

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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.

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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

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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.

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Economy

Are we close to the end of physical money? Coins and banknotes are practically disappearing in these countries — Executive Digest

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Are we close to the end of physical money?  Coins and banknotes are practically disappearing in these countries — Executive Digest

At present, the number of payment alternatives in addition to physical money such as credit cards, payment with applications or mobile phones is increasing, and well-known coins and banknotes are gaining ground.

However, ElEconomist explains, there is evidence that, despite the apparent growth of other forms of payment, physical money continues to hold. According to the European Central Bank (ECB), almost half of all payments, 48%, are made using banknotes. In the US, the US Federal Reserve has noted that money in circulation has even reached an all-time high.

There are countries that are discussing this issue, and some countries are testing formulas for moving to a fully digital model. A Spanish website has compiled a list of cases where money could be on the brink of extinction.

Sweden:

Despite having the oldest central bank in the world, it has been leading the fight against physical money since the beginning of the last decade. Between 2011 and 2020, Swedish citizens reduced their use of cash from 39% to 9%. With companies, banks and other institutions refusing to accept payments in coins or banknotes, Sweden would be quite willing to move away from cash if rural areas didn’t resist its decline.

At the same time, the Swedish government is at the same time trying to slow down the transition by asking citizens to keep money at home.

Norway:

Norges Bank, the country’s central bank, has released figures that Norwegians only use banknotes or coins for 3 to 4% of their transactions, and the lack of physical liquidity in the country is a concern, so although they are about to achieve full digitization, they are trying to stop this is.

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The Norwegian Consumer Protection Agency has already received complaints about the inability to pay for bus tickets or cafes in cash in the center of the capital, and the country’s Pensioners’ Association has also warned of the concerns this raises among a less digitized population.

Netherlands:

It is one of the countries not only in Europe but also in the world with the most development in this aspect, with a share of cash payments below 24% compared to 52% in 2005, 40% in 2011 and 30% in 2015. . . .

Data from the Dutch Payments Association shows that card usage for payments now exceeds 75%, with mobile payments up 30% last year.

In this case, banks are the biggest drivers of total digitalization to cut costs at branches and ATMs. In the Netherlands, 89% of customers are already digital, compared to the European average of 60%.

China:

The country is becoming so digitized in this regard that the People’s Bank of China is imposing fines on public and private institutions that refuse to accept cash payments in order to “protect citizens’ rights to use cash.”

The latest survey by the region’s central bank shows that 66% of payments in the region are made using a mobile phone, compared to 23% in cash. At the same time, the percentage of card payments is even less: only 7% of transactions.

South Korea:

Since 2016, the country has been trying to digitize payments, which is why cash in circulation is only 40% of the total, which is an all-time low. Of the total number of transactions in the country, only 17% are made in physical money.

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Canada:

In the country led by Justin Trudeau, Visa said citizens are “ready to move away from cash” as Canada “has one of the highest penetration rates of credit card payments in the world (70%)”. As a percentage of total transactions in 2021, only 17% were made with physical money. Cards make up 60% of transactions and electronic payments 12%.

Australia:

The latest report from The Global Payments explains that the country is accelerating its transition to cash, which will account for just 2% of all transactions by 2025. From 75% in 2007 to around 30% in 2019.

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Economy

Vinted has been targeted by online scammers | Internet

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Vinted has been targeted by online scammers |  Internet

Platform online Wynted was attacked by tell jokes. According to Portal da Queixa, a Lithuanian company that buys, sells and exchanges goods has received several complaints from Portuguese users who have been deceived by fraudulent schemes.

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Economy

How Asia’s richest woman lost half her fortune in a year

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How Asia's richest woman lost half her fortune in a year

60 minutes / YouTube

For years, Yang Huiyan’s fortune has been at the center of headlines, comments, and calculations outside of China.

Yang Huiyan, who is only 41 years old, is not only the richest woman in her country, but also the most the richest in all of Asia.

FROM inherited a real estate empire from his father over ten years ago, his fortune continues to grow. But in 2022, everything changed: last year it suffered a real decline.

According to Bloomberg Billionaires Index calculations, Yang saw his net worth drop more than 52% last year.

In 2021, Bloomberg estimated the fortune of a business woman at about $33.9 billion (about 33 billion euros), which fell to around $16.1 billion (about €15.7 billion) in July last year.

Economic analysts saw this not only as a grim sign of the state of the Chinese housing market, but also as a serious warning that The future of the world’s second largest economy.

This comes as the country’s real estate sector has been hit hard by falling home prices, declining buyer demand and a bad debt crisis that has affected some major property developers since 2020.

The situation has reached the point where some banks ran out of moneywhich caused protests in some cities of the Asian country.

And although Yang remains the richest woman in Asia, her position has begun to falter.

Yang is followed by chemical fiber entrepreneur Fan Hongwei, who also has an estimated net worth of around $16 billion, according to Bloomberg.

But who is Yang Huiyan and how did he make one of the biggest fortunes in the world?

heiress

Born in 1981 in Shuntak, a district of Foshan City, Guangzhou Province, in southern China, Yang is the daughter of one of the richest people in the Asian country: Yang Guoqiang.

Raised in one of China’s most influential families, she received an excellent education and was sent to the United States at the time of youth. In 2003, he graduated from the Faculty of Arts and Sciences at The Ohio State University.

Returning to China, he inherited from his father in 2007. most actions Country Garden Holdings, China’s largest real estate company.

Founded in 1992 in Guangzhou, Country Garden Holdings has been successful since its Hong Kong IPO and has raised about $1.6 billion, about the same as Google’s since its 2004 US IPO.

Although Yang is known for staying out of the public eye and living a low key lifestyle, center of countless headlines inside and outside of China.

One of the most high-profile cases occurred in 2018, when legal documents known as the “Cyprus Papers” were leaked and revealed that he had obtained Cypriot citizenship in 2018, despite China not recognizing dual citizenship.

Problems

Chinese market researchers describe Yang as a creative woman with business acumen.

In June last year, the International Hospitality Institute recognized it in its ranking the most influential people in the global hotel industry.

However, his business was already showing signs of weakness.

The situation in the real estate market in the country since 2020 has become more complicated not only because of the coronavirus pandemic, but also because the Chinese authorities tried to curb over-indebtedness in real estate.

This resulted in large builders facing payment struggles and forcing them to renegotiate a contract with your creditors.

The crisis worsened when Evergrande, the most indebted Chinese real estate company, defaulted on its dollar-denominated bonds in late 2021 after months of liquidity problems.

Since then and this year, several other major groups, including Kaisa and Shimao Group, have also applied for creditor protection.

The crisis has escalated in recent weeks after news of a “buyers’ strike” after thousands of people stopped paying their mortgages due to the delay in starting construction work on the houses. Due to the delay in the delivery of houses, companies did not start receiving mortgage payments on time.

All this led to the fact that Zagorodny Sad, which felt good in the first months of the pandemic, also faced liquidity problemto such an extent that last July he had to sell shares at a discount of almost 13% to raise funds.

And the long-term picture doesn’t look good for Young, his fortune, or the company he represents.

In a July report last year, ratings agency S&P estimated that real estate sales in China may fall by a third this year because of the mortgage strikes, a collective movement in which buyers decided to put mortgage payments on properties that were behind schedule.

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Meanwhile, Capital Economics, an independent London-based economics research firm, predicted that “without sales, many other companies will fail, which is financial and economic threat“for China.

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