How to secure the value of your money during Coronavirus crisis

The Covid-19 pandemic crisis has become a very important conversation that is covered daily by the media and blogs extensively, as all news headlines are engaged in researching the impacts of the virus and its repercussions on the global economy, health and various aspects of life. Certainly, Turkey is not in isolation from this global crisis that is overshadowing the entire globe, here comes the most frequent question nowadays, which is simply how should we act when crises of this magnitude occur to protect the real value of our money?

 

Abandon cash completely:

In the shadow of the major crises, currencies begin to decline, and in general, many banks around the world are unable to cover the demands of their clients who want to withdraw their money, or even a part of it, as the crisis has prompted many to request the withdrawal of their money for fear of the repercussions of the Covid-19 pandemic crisis, which forces banks in some countries in such difficult and rare conditions to impose restrictions on withdrawals of the amounts allowed in order to maintain cash flow at the time of the crisis as this is considered a normal banking procedure in which banks protect money in such cases, never the less and with the passage of time and the expansion of crisis the money gradually loses its value. On the other hand, there are a few countries, such as Turkey, that managed the crisis in a very distinct way from an economic point of view, as Turkish banks allowed their customers to withdraw larger amounts than usual through the widespread ATM machines to help them avoid going to the bank and reduce mixing, and even today Turkish banks still cover all cash needs for companies and individuals alike and did not impose any restrictions on the amounts withdrawn, which has impressed many economic analysts around the world and pushed them to compliment these bold steps taken by Turkey in the shadow of the Corona pandemic, which raised the percentage of feeling safe In foreign investors towards Turkey. But as we mentioned earlier, not all countries can take similar steps, so what are the best steps and solutions that an investor can take before banks begin to impose their restrictions?

 

1- The best solution to buy assets:

The most important characteristic of assets is that they retain their true value for long periods of time and do not lose their value even when the economy declines. And it is the option that proved its effectiveness in light of major crises such as the World War and during 2008 crisis, whereas the inflation rate increased and the real value of the funds declined, during those times many investors in real estate investment found a safe haven where they were able to maintain the value of their funds as the demand for housing does not stop even in the worst cases.

Although real estate investment is the best option in times of crisis, caution is required in this case from investors during the selection process. For example, investing in projects under construction carries some risks as it is expected that real estate development companies will face financial problems and under construction projects may be delayed by the deadlines for the delivery of real estate to investors. Therefore, it is preferable in such cases to invest in ready projects with a rental return to avoid any form of risk.

And the city of Istanbul, in particular, is considered one of the best real estate investment destinations in the world for the foreign investor, especially in the current period due to the following reasons:

  • The temporary decline of the Turkish lira exchange rate against the US Dollar gives the foreign investor the opportunity to buy real estate at a price lower than usual. After the end of the crisis and the return of life to normal, the investor can reap profits from improving the currency and increasing real estate prices at the same time, which is a big attraction To invest at the moment.

 

  • The high return on investment, as the return on investment in Istanbul, is among the highest in the world where the annual price increase rate plus the annual rental return reaches an average of 18% annually.

 

  • Attractive urban development and reasonable prices, since Istanbul residential complexes are famous for their urban development and design elegance, as they mostly provide social facilities such as swimming pools, gardens, sport clubs, tennis & basketball courts, cafes and other facilities that give a high level of luxury to the lives of the residents of these complexes.

 

  • Easy and reasonable payment plans, as most development companies make it easier for the investor to pay in the most appropriate way, for example, these companies allow the foreign buyer to purchase his real estate in comfortable installments or in cash at a large discount on the price, while most countries do not allow the foreign investor to purchase in installments and accept only cash.

 

  • The large population in Istanbul, which makes this city the fifth largest city in the world in terms of population, which reached 15.5 million people according to 2019 statistics. For this reason, many investors prefer to buy real estate because of the ease of renting it and the large internal demand for housing and then re-sell it within a short period not exceeding 5 or 6 years to take advantage of the price increase that exceeds 12% annually due to the large internal and foreign demand for housing within Istanbul.

 

  • Obtaining Turkish citizenship, if an investor purchases properties worth of $ 250,000, and is allowed to resell them after 3 years as a minimum with a good profit margin and thus Turkish citizenship becomes an advantage for the investor, especially since he is not obligated to hold this property for more than 3 years in terms of Turkish Law.

 

  • Easy and fast legal procedures that shorten the time of the foreign investor and facilitate all his transactions clearly, compared to the difficult procedures that foreign investors usually face in many other countries.

 

  • The mega projects that the Turkish government plans within the city of Istanbul, such as the upcoming Istanbul Canal project, which will be launched soon, which is considered to be one the largest upcoming projects in Europe, and the largest airport in the world that takes place in Istanbul, which opened its doors in 2019 and many other projects that contribute to raising the value of the city and are expected to impact the real estate prices positively.

 

  • More than 13 million tourists visit Istanbul annually in normal conditions for its well-known tourist attractions within the city that attract tourists in large numbers annually.

 

  • The mild climate that characterizes Istanbul.

 

  • The only city in the world that combines both European and Asian continents separated by the charming Bosphorus, which is distinguished by its beauty that gives this city a different value from any other city in the world, which is reflected in a positive way in the real estate value of this city and made the demand on its real estate at its highest.

 

  • All services are provided to the highest standards, which usually attract the attention of foreign visitors.

 

 

2- Buying gold:

Buying gold is one of the well-known traditional solutions in times of crisis. Gold and its semi-precious metals are considered an effective tool in dealing with crises in general. And a lot of people go to this option at the beginning of any crisis, which leads to a decrease in the quantities of gold offered and an increase in its prices due to the increased demand for it at such times. Usually, late buyers face problems in finding the required quantity and the appropriate price.

 

The main problem in investing gold in times of crisis is securing the quantity and also in terms of its safety, as when crises expand, the percentage of safety decreases and the rate of theft rises, and this matter is important for the segment of investors who buy tangible gold, while for investors who want to buy gold through Banks, which is a safer solution than tangible acquisition of gold, but it must be taken into account that when the crisis is global and not local within a specific country, it is possible for the investor to face some challenges after the crisis ends, such as liquidating these quantities and withdrawing cash from banks and in sometimes a large number of investors liquidate gold in large quantities amid crisis, the offer returns again to massive availability, as was the case before the crisis and price may begin to decline, which is the negative factor that makes some of the investors unwilling to adopt this solution, knowing that it is an excellent solution to protect the real value of money and profit in the medium term and the long.

Author: Sami Alnakib

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