Monday, April 15, 2024

Currency Transfers Are Soaring As Global Real Estate Booms

One of the expected casualties of the pandemic was property prices. The logic seemed sound. With limited movement, few people were selling their homes. In addition, potential buyers had lost their sources of income. Both supply and demand were expected to plummet, leading to record low valuations.

However, while prices did drop initially, this dip did not last long. On the contrary, property prices actually started going up. This trend has continued, leading to homes being sold at record prices. The primary reason for this trend has been that demand did not drop off nearly as drastically as supply did.

In the UK, this has meant booming property prices, as has been the case in Europe and the US. But the fact that the pandemic has just not come to an end has meant that these trends have stayed fairly local. People who would have bought property abroad have waited for things to get back to normal.

Now, as 2022 begins, global real estate is once again attracting investors. One of the direct consequences is that people are sending huge sums of money abroad. Here’s what you need to know.

The Future of Global Real Estate

If you’re wondering why investors would buy real estate abroad in 2022, you’re not alone. In usual times, investors prefer to go with bets that are almost guaranteed. They won’t spend hundreds of thousands or millions of pounds on homes that might lose their value. So why are they willing to take the risk when the road ahead is still so unclear?

The pandemic is not yet over. A year ago, we thought the end was mere months away. Today we have less certainty than before. Buying property abroad that you may not even have access to seems strange.

The approach of investors is a sign of how much things have changed over the past two years. The simple truth is that we live with far less stability than we used to. Any investment today is riskier than it would have seemed two years ago. Investors are adapting to the new normal. In order to make money in a post-COVID world, they cannot rely on the same kind of guarantees they once believed they had.

In this context it makes sense that global real estate is rising in popularity again. Property prices are going up, and this is a trend that does not look anywhere near to ending. Waiting any longer to buy property only guarantees that investors will be unable to take advantage of this trend. By the time they feel that the risk has levelled out, property will be extremely expensive.

As mentioned, this has impacted the international currency transfer business.

Currency Transfer in a Pandemic

In the first stage of the pandemic, the international currency transfer industry struggled. While global recognition of the ease with which businesses can operate remotely helped to further globalise the world, people could not spend money abroad. Travel restrictions led to a lack of tourism as well as a drop in foreign investment.

In fact, it felt like the perfect time for foreign exchange to become a thing of the past. After all, in an increasingly digital world, a decentralised currency made more sense than ever. Of course, the currencies that promised to provide this solution have not taken off in a practical sense. While cryptocurrencies soar in value, they have little actual use in the real world.

Over the past year, we’ve all seen that a decentralised currency is nowhere close to being ready for widespread adoption. And, as the world has opened up again, this has meant reverting to what we’ve been doing for the past hundred and fifty years. People needed traditional foreign exchange to spend money while travelling or when investing abroad. The reemergence of global real estate investment has led to people sending massive sums of money abroad once again.

The companies that this impacts most are the private foreign exchange companies, rather than the banks. Because Forex is only one service banks provide, their survival has been premised on other factors. Few banks in the UK or elsewhere have significantly improved their Forex options over the past two years. International currency transfer companies, on the other hand, have had to work towards a new normal.

But how do currency transfer companies differ from banks?

International Money Transfer Companies

International money transfer companies came into existence because the Forex services banks provided were simply not serving their customers. Banks charged high fees and commissions to transfer money abroad. It could take over a week for them to transfer your money into another account. They also provided poor exchange rates which, when compared with the mid-market rate found on Google, cost both the sender and recipient money.

International currency transfer became a popular industry, led by startups run by people who had personal stakes in their success. These were people who worked abroad and sent remittances or received salaries in a forieng currency. They needed to find the best way to transfer currency to a foreign bank account and therefore created cheap currency transfer systems.

The best in the currency transfer business, companies like Wise (formerly TransferWise) were created by innovative people doing business worldwide. They found ways to give the best foreign currency rates without compromising their own bottom line. Wise, among other companies, use a process that circumvents the outdated SWIFT system entirely. Instead of actually sending money abroad, they match senders and recipients in the countries in which they operate, eschewing the need for expensive processing fees.

These companies have needed to provide a higher level of transparency than the banks do, considering their promises to offer an alternative that suited senders rather than themselves. They could not hide additional fees in poor exchange rates or take commissions from both sender and receiver.

Big Business Post-COVID

COVID-19 put these companies under pressure, with tourism halted and foreign investors not wanting to risk spending in an unstable world. The reemergence of global real estate as a force has been a major boon to currency transfer companies.

Investment in foreign real estate means that investors are regularly sending big sums of money abroad in payments for expensive properties. They provide business on a much bigger scale than individual travellers or foreign workers do.

These money transfer companies are still looking ahead with caution in 2022. While things are getting back to normal, we have repeatedly seen that the next setback may be just around the corner. However, for now they are riding the wave of the type of confidence possible in a post-pandemic world.

The good news for consumers is that these circumstances are the best motivation for companies to improve what they offer. They need to widen their services to better serve customers, and provide the best customer care in order to compete.

Over the next few months, we can expect to see global real estate continuing to boom, leading to a strong future for foreign exchange companies.

Claire James
Claire James
Claire is an accounts manager at Fire Digital UK, an online publishing and content marketing company based in the North West.

Recent Articles

Related Stories

sakarya escort bayan Eskişehir escort bayan