Covid-19 created a global economic storm that increased the stress factor in various business sectors, from transportation to accommodation and agriculture. However, as many investors have known for a long time, an economic slowdown along with the speculative exchange movements may be a good reason to buy a real estate, which is actually the safest port. Real estate investment always caters to a variety of investor needs, including creating added value and revenue.
It is a fact that the Covid-19 pandemic has a huge impact on financial markets and the worldwide economy. For this reason many investors, property owners, potential homebuyers and property owners ask themselves: does the COVID-19 crisis affect the real estate market? Are real estate prices rising or falling due to COVID-19? Should I buy a house during this period? We will try to address these and similar questions below.
Are property prices falling as a result of the Covid-19 crisis?
According to current information, no unusual development has been made recored. The Covid-19 pandemic creates a contraction in demand due to travel restrictions, resulting in short-term changes in purchase results, but does not reduce demand for housing in the long term. Therefore, there is no dramatic downward trend in prices.
The reason why the Covid-19 crisis is not currently having so much impact on property prices is relatively simple: real estate does not lose its appeal to investors at this time. A house is still considered a stable investment in times of crisis.
For many years, the demand for living space has exceeded the supply of real estate in many cities and regions due to population growth and urbanization. At this point, Turkey became a safe haven for those coming from outside the country as well as increasing domestic demand. This also had a positive impact on demand for property besides domestic demand. This basic trend will not change significantly even in the current situation. Especially in Turkey, causes of excessive demand (population growth and mobility, internal and external migration) will continue to exist increasingly after the pandemic.
The strong demand for housing in recent years has resulted from population growth and constant influx to metropolitan areas and medium-sized cities. This has led to a significant increase in prices for sale and rental property. Even new construction activities could not meet the high demand. Demand for the residential area is not expected to decrease in the face of the Covid-19 crisis; because people should always have a roof over their heads. Moreover, with the voluntary quarantine brought by this crisis, the fact that everyone must have a house and that our most important places are houses have been further reinforced. The idea of “home is important” is well established in the minds of the new generations. Yes, people get married and get houses. This cycle will continue.
Should I Wait Before Buying?
Understandably, some potential buyers are currently uncertain about whether a real estate investment makes sense. But for us, these concerns are irrelevant: given the market situation that has not changed drastically at the moment, there is no economic reason for investors and owners not to buy a property. For investors and potential buyers, the attractiveness of real estate has therefore never been broken. Moreover, times of crisis embody their own opportunity and it is necessary to hurry before the work is done, and not to postpone investments, especially in real estate.
Does Real Estate Make You Lose?
Remember that real estate is an interesting asset. People can never give it up. Its importance is even among the proverbs: “Space in the world, faith in the hereafter”. When exchanges are bad, money becomes volatile, crises arise; the investor looks for other opportunities and remembers that real estate is a safe haven.
Although false assumptions about real estate prices and stagnation environments scare amateur investors, professional investors who evaluate opportunities do not give up real estate. Donald Trump, the US president today, is a living example of this. Not everyone can be the President of the USA, but they can protect their investment from crises through real estate.
Do Real Estate Investments Generate Income?
Monthly rent payments are always valid and are not dependent on fluctuations in the stock market. Even with the lowest income, people tend to pay their rents even if it’s delayed. In the days of Covid-19, some commercial rents were not canceled even if delayed. In residences, even those who live in slums continue to lease to the landlord.
One of the main reasons to consider investing in real estate is that it is seen as an opportunity to generate income. Real estate investors also have another advantage. Since they have control over rent prices, they link the increase in rents to inflation and changing interest rates when making contracts. Thus, they do not experience a possible loss of inflation. They also keep up with the rising prices due to inflation by raising the rent in rent renewals. Think of it as a permanent commodity, which is sold again every year. Moreover, its capital is protected and increasing.
How am I Going to Buy in This Environment?
The crisis, social distance and quarantine practices caused by Covid-19 raise the question of whether a real estate sale for many property owners can now be done in a healthy way. Due to the Covid-19 crisis, it has become almost impossible to study the qualities of properties with their real physical appearance. Understandably, neither the seller nor the buyer wants to face the risk of infection. The digital age is coming to our rescue here. In this era, you can see a house without leaving your place, like it, visit it virtually, examine it with live connections and buy it. A modern camera allows you to see your property as if it were there. Moreover, in the comfort of your own home without risk. You can send your money digitally from your account without touching your hand and request your title deed to your home by cargo. Pandemic days have come as if in order to teach this method to people naturally.
To this end, you can benefit from this, thanks to the TEPP model online real estate sales method that Trem Global has developed and I have introduced before.
In short, in a recession, you can turn to real estate as either a residential area or investment opportunity for yourself or your children who will marry. It means seizing the opportunities while thinking of the future to invest wisely in a safe country with a well-working health system such as Turkey.
I offer my respect, greetings and love to all our investors that we have served with and benefited from our services, and wish you a healthy future.
Muhammet Torun
Trem Global CEO