Should You Invest in Real Estate During Inflation?

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June 8, 2022 Investment Decision

The ongoing Russia-Ukraine War has sent many economies spiraling out of countries. Several countries such as Lebanon and Sri Lanka have declared themselves bankrupt, and others are yet to follow. The alarming rate of inflation and price surges has got everyone thinking – how can we protect our assets and safeguard our finances for the future? Bangladesh is not far behind. Despite handling the Covid-19 pandemic fairly well, its aftermath has seen a great hike in commodities and devaluation of currency, which became bad news for everyone, especially those seeking investment opportunities. The result is a buying frenzy among the public, who are still largely confused in what to invest. From gold to land, people are doing everything it takes to prevent losses and secure a better financial future. 

If you are someone looking to invest in a safe, risk-free, profitable asset, we understand your concern and are here to help you out. Read on to find out how you can sail through inflation with ease by investing in real estate.

 

Gold is not the Standard Anymore

While international gold prices usually remain stable, this has not been the case in recent times. The local price of gold largely depends on global prices and exchange rates. The Taka devaluation and the ongoing Russia-Ukraine War caused gold prices to surge around March 2022, which was followed by a sharp decrease later on. Experts recommend using around 5-10% of your savings or investment money behind gold, as its prices are constantly fluctuating, but it will not be enough to prevent financial damage during inflation season. In a time of rampant economic turmoil, keeping gold safe and secure also poses a huge problem.

 

Stocking up on Crypto & Stocks is Too Risky

A large number of people are investing their money into various cryptocurrencies. While digital currency looks like a good option based on the hype, it might not be profitable in the long run. It is extremely volatile, which means one time you can have it all and another time you will not. Many crypto investors had to deal with scams and hacked accounts, losing every bit of their investment in the process. As there is no central agency that backs cryptocurrencies, you will have no one to complain to and no way to get your money back. As for the stock market, there is a lot of uncertainty that goes on during an inflation crisis. It makes sense for investors to become nervous in this case. Therefore, it is better to look for a more stable alternative to crypto and stock. The future is unpredictable, with many countries almost on the verge of bankruptcy. Since the US Dollar is losing its grip on multiple economies as the central currency for oil purchase, there has been a profound effect on other currencies as well. Therefore, investing in foreign exchange will also not be a wise decision at the moment.

 

Buying Land & Apartments is the Best Solution

Bangladesh is also going through sky high commodity prices and inflation. Land prices have soared, and land is rarely available for buying. Most landowners opt for joint ventures with qualified real estate developers nowadays. Investing in land is always profitable because its price will always increase, especially during inflation, and there is no tax associated with land ownership. Since land is hard to come across, a good alternative is to buy an apartment instead! Buying an apartment from a renowned real estate developer such as bti ensures that you get exceptional construction quality and design at a competitive price. It is a guaranteed safe investment because there are no taxes associated with homeownership and the price of apartments always appreciates over time. Now apartment demand is at an all-time high, especially in Dhaka and Chattogram metropolitan areas. Therefore, if you choose to buy an apartment now and then sell it later you are sure to make a huge profit! 

 

The Real Question – is it Worth it?

Absolutely! Investors usually have nothing to worry about when it comes to investing in real estate during inflation. Inflation trends and real estate prices tend to not go hand-in-hand, but housing prices do increase when there is a supply shortage and increase in the price of building materials. This is the only downside: during price hikes it might become difficult to buy apartments but during inflation that may not be the case. However, with great home loan options and low interest rates available in the country, you can afford a property now with consumer-friendly home financing solutions and your savings.

Remember that your property should generate cash, otherwise you would be owning a lazy equity property. it is better to put it to good use. You can choose to rent your apartment and keep rent on par with inflation prices, which will provide you a steady surplus of cash. Selling your apartment during inflation will get you higher prices, but making multiple real estate investments during inflation is a much better idea than selling because of the huge cash flow. As a Forbes expert mentioned, ‘real estate is a stable asset that beats recession.’

Did this article help? If you are in need of expert real estate tips and looking to invest into a quality apartment and associated proceedings, explore the full range of services from the House of bti. Call 16604 or visit www.btibd.com for more details.

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