How to respond to unexpected regulatory changes impacting your investments.

We live in a rapidly changing world. Since the start of the millennium, we've entered a new era of globalization, where countries formed new alliances, opened borders, and welcomed foreign investments.

Over the last 20 years, we've witnessed substantial investment inflows into global real estate markets. Today, diversifying portfolios with real estate investments has become a common strategy for investors.

However, in the past decade, we've seen governments implementing regulations that restrict or control foreign investments due to political, economic, or social reasons, security concerns, protection of domestic industries, or preventing monopolies.

For example, recently a new law was enforced in Northern Cyprus, that restricts foreigners from owning more than one property. The region was a hotspot for investment and developing business over the past few years, leading to significant economic growth. However, this influx also brought some negative consequences that prompted the government to make these adjustments.

Other examples include changes in Greece's Golden Visa Program, Brexit, the latest military conflicts, cancellation of passport and residence programs in many European countries, imposed sanctions, COVID lockdowns, and changes in bank policies.

So, how should investors react to these unexpected changes?

While it’s impossible to completely prevent these situations, you can take steps to mitigate risks and make better investment decisions:

· Invest in stable economies.

· Consult with long-term real estate professionals, legal experts, and financial advisors.

· Diversify investments across various countries.

· Stay informed about political, economic, and legal developments in your investment areas.

· Have a clear exit strategy and invest in properties that can be quickly liquidated.

· Regularly review and adjust your investment portfolio.

· Monitor market conditions and anticipate regulatory shifts.

· Analyze market trends and historical data to understand cyclicality.

· Act quickly when necessary.

While you can’t prevent regulatory changes, being proactive can help you navigate and adapt, minimizing their impact on your investments.

Your Real Estate Advisor

Ina Toma