What is the significance of the saying "Real estate may get sick but never dies"?

Does Real Estate Get Sick?

At the beginning of the nineteenth century, the American real estate investor "John Jacob Astor" made his famous statement that spread far and wide after him: "Real estate gets sick but never dies", expressing his belief in a theory that was widespread among real estate investors at that time: that the need for real estate will continue to increase as long as the population grows...

Later, this theory became a principle and a rule in the field of real estate investment, especially after it proved its validity every time.

When Does Real Estate Get Sick?

After agreeing that real estate illness is a natural occurrence in the real estate market, we should know that there are some indicators that lead to this illness, including but not limited to:

1. In Case of Wars and Conflicts

This is one of the main reasons that lead to real estate illness, affected by the instability in countries experiencing conflicts, where real estate prices can drop to unprecedented levels. This is witnessed in all regions and countries affected by conflict, as real estate prices plummet at a certain stage to their lowest levels before stabilizing again and starting to rise back to their usual market value after security returns to those areas.

2. In Case of Political and Economic Instability

Among the less impactful illnesses are cases of political and economic instability in the country, which leads to a decline in the confidence of foreign or even local investors in investing during this period until political or economic stability returns.

In both previous cases, there is a group of smart investors waiting in the shadows to seize the most profitable and lowest opportunities after those crises end.

Learn more about property prices in Turkey 2023

3. Absence of Real Estate Market Legislation

The source of the problem and illness in real estate may be internal, for example, due to unstable decisions and the absence of legislation and laws regulating the real estate market, which naturally leads to disappointment among new investors and the search for safer havens for their capital, away from the real estate market, which then starts a downward trend.

4. Sudden Changes in Systems and Laws

Sudden changes in real estate regulations and laws can have a significant impact on the real estate market, especially if the changes are not well planned or communicated, which may cause confusion among investors and thus decrease overall market activity.

For example, if the government suddenly imposes a new tax on real estate transactions, this usually increases the cost of buying and selling properties, which may weaken demand for real estate investment, as these taxes will eat into investors' profits.

5. Real Estate Bubbles

In some cases, sudden changes in real estate laws or unplanned market disruptions lead to what is known as a real estate bubble, where investors rush to buy properties before the new rules come into effect, causing prices to rise. Once the new rules are implemented, the bubble bursts, resulting in a sudden drop in prices.

Therefore, it is important for governments to carefully consider the potential impacts of any proposed changes before implementing them, to avoid repeating past mistakes, such as those witnessed in the US real estate market in 2008 when the US government introduced a number of new regulations in response to the financial crisis, including new lending standards and specific mortgage requirements, which made it difficult for people to buy homes after these decisions, leading to a rapid decline in housing demand and contributing to the collapse of the housing market at the time.

What Is the Meaning of the Saying "Real Estate Gets Sick but Never Dies"?

This saying implies several things:

First: Real estate can suffer from illness, and we have already discussed the different forms of this illness above.

Second: Illness is followed by recovery, or at worst, slight improvement.

Third: Despite this illness, real estate never dies, which protects capital from vanishing, unlike some other investments.

Fourth: Investing in real estate is relatively long-term and can provide stability and security in times of economic uncertainty. Real estate values may fluctuate in the medium and short term, and based on this, profit opportunities are created.

Why Is Real Estate Investment Considered One of the Best Types of Investment?

Real estate investment remains the leading type of investment and attracts the attention of capital owners and investors seeking to grow their wealth, with guarantees of not losing their capital, in addition to recording new profits.

So, why is real estate investment considered one of the best and most important types of investment?

We answer this important question through the following points:

• First: Real estate investment is the best guarantee for preserving capital, as the money remains in this fixed asset, unlike other types of investments.
• Second: The possibility of making a profit remains the most likely, but only if the property is chosen wisely, in an investment location with potential for growth.
• Third: The possibility of benefiting from the property twice: either by renting it out or living in it, as well as selling it when its price increases.
• Fourth: The growing demand for real estate products has made real estate investments like goods that never stagnate, but this depends on the investor's acumen and the quality of their choices.

Imtilak Real Estate: Your Guide to Safe Investment in Turkey

Despite the great momentum in the Turkish real estate market and the abundance and diversity of available properties, investing in real estate requires a degree of wisdom and expertise. There is a fine line between profitable and unprofitable ownership, seen only by real estate experts who excel in dealing with real estate products, especially in the Turkish market, which has its own characteristics and vastness.

Imtilak has always been and continues to be the destination for investors seeking safe and profitable ownership at the same time. Its extensive experience has enabled it to guide its clients' investments toward guaranteed success, through quality property selection, insightful advice based on the great experience of the Imtilak team, as well as its exceptional and free services and the strongest offers ever.

Edited by: Imtilak Real Estate©