SWOT Analysis of Real Estate Sector
- It is an investment asset that increases in value over time.
- It is less volatile (risky) than other investment assets particularly equities.
- The owner of a real estate asset has full rights over the asset and can add value to it through refurbishment and good management.
- It is used to hedge inflation risk and is a good store of wealth.
- Preferred collateral/security by financial institutions.
- There is no single market for real estate i.e. it can be traded at auctions or open markets by estate agents and surveyors.
- Ownership rights cannot be easily transferred.
- It is a highly illiquid asset.
- It requires a large capital to invest in.
- Low supply.
- Global demand for real estate is strong and high.
- Real estate is poised for rapid growth.
- Potential to diversify into other sectors.
- New sectors offer great potential i.e. student accommodation & care homes.
- Economic slowdown may affect demand i.e. periods of recession.
- Competition from other investment asset classes such as equities and bonds.
- Seasonal demand may affect prices