Real economy
What is it?
It refers to the part of the economy related to the production, distribution, and consumption of tangible goods and services. In the real estate context, investment in the real economy refers to the acquisition and development of physical assets, such as real estate properties.
Unlike financial markets, which operate with intangible assets such as stocks, bonds, or derivatives, the real economy focuses on productive activities and tangible goods. These activities are fundamental to economic growth as they generate employment, infrastructure, and resources to meet society’s basic needs.
Key aspects to consider
In the real estate sector, investment in the real economy includes:
- Construction of residential and commercial buildings: Projects that generate direct value through rentals or sales.
- Urban infrastructure: Development of roads, bridges, and public spaces that promote connectivity and social well-being.
- Property rehabilitation: Improvements to existing assets to increase their value and market appeal.
The advantages of investing in the real economy, particularly in the real estate sector, include long-term stability, protection against inflation, and the potential for generating recurring income. However, these investments can also present challenges, such as high initial costs, low liquidity, and exposure to economic cycles.
The real economy is an essential pillar for sustainable development, as it directly connects investments with tangible progress. In the case of the real estate sector, these investments not only generate financial returns but also contribute to meeting housing, commercial, and industrial demands.