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Secure Your Investments: Why Buying a Property During a Crisis Is a Bad Idea

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Secure Your Investments: Why Buying a Property During a Crisis Is a Bad Idea

The Relevance of Real Estate Transactions

Many are currently questioning whether it's a good time to engage in buying or selling real estate. Let's delve into this issue and try to analyze it.

Future Outlook on Property Prices

One of the most common questions that arises when looking at the real estate market is whether property prices will continue to rise. For instance, if you have a certain amount of money and were planning to invest in real estate, is it advisable to do so now or better to wait?

Planning a Real Estate Purchase

If you are already considering purchasing property and have the necessary capital, a logical question arises: how will the real estate market change in the near future? Is it wise to invest now, or is a price decrease expected, making a purchase more advantageous in the future?

Real Estate Market Recommendations

If you have plans to buy property, stick to your plan. However, at the moment, I do not recommend purchasing real estate. Furthermore, for those contemplating selling their property, I would advise not to delay and sell it now.

When to Sell Real Estate

Selling property becomes relevant if you had already planned this step. There is no need to sell your property unnecessarily, but if you had intentions to sell, it's better to do so in the near future.

Why Now Is the Best Time to Sell

Currently is the optimal moment to put your property on the market. In the following sections, I will explain the reasons why I believe the current situation favors sellers.

Real Estate Market Analysis in Inflationary Conditions

People with means often succumb to general euphoria, hysteria, or panic. Lately, many are looking to invest their money in a way to shield it from inflation.

Factors Influencing Real Estate Price Growth

Let's examine the factors influencing real estate price growth. The primary condition for price increase is demand. For real estate prices to keep rising, buyers must continue actively purchasing. It seems evident that without constant interest from buyers, the real estate market will not sustain steady growth.

Real Estate Price Growth: Myth or Reality?

In the absence of buyers in the market, the question arises: what could cause real estate prices to increase? Is it reasonable to expect a rise in housing costs in the near future?

Analogies with Other Markets

Let's consider examples from other sectors of the economy. The observed increase in prices of building materials and buckwheat can be explained by simple demand—people started acquiring them more actively, leading to price hikes.

Real Estate Prospects in a Crisis

Applying this logic to the real estate market raises the question: who will rush to buy apartments, for example, in a year when the global crisis reaches our country? The likelihood of increased buyer activity during a crisis period contributing to housing price growth seems improbable.

Real Estate Market in the Context of a Global Economic Crisis

During months like August, September, and October, the question arises as to who will be rushing to buy apartments. For housing prices to rise, the number of buyers must increase compared to today, and these buyers must be willing to accept price hikes.

Impact of Economic Crisis on Demand

During a global economic crisis, people worldwide experience financial difficulties. This leads to a crucial question: who will be buying apartments in such a period? What factors could form a queue of potential buyers if most of the population lacks the funds to purchase real estate? These aspects should be considered when analyzing market trends and predicting changes in housing costs. Answers to these questions will help understand how the real estate market will evolve in the near future and which strategies could be effective for investors and property sellers.

Real Estate Market Forecasts

A decrease in property prices worldwide is expected in the upcoming year. The main reason for this is that people simply won't have enough funds to make purchases. Currently, inflated property sale offers can be seen on the market, including apartments whose prices have increased. This is due to people withdrawing money from banks at present.

History of Real Estate Investments

A past example: in 1998, buying a flat turned out to be a wise decision. After 10 years, the value of this asset significantly increased. Past years' experience shows that real estate investments can be a profitable way to preserve and increase funds in times of economic instability.

Investing in real estate and financial safety net

In the realm of investments, especially when it comes to real estate, it is crucial to stay informed about current trends. So, let's delve deeper: is it currently advantageous to invest in real estate? How can one avoid losing tens of thousands of euros? I am ready to address these questions.

Savings for a "rainy day"

Is it necessary to set aside money for a "rainy day" or is it better to invest them? This question interests many. My answer is unequivocal: yes, undoubtedly, it is worth having savings for unforeseen circumstances. I advocate for the creation of such a financial safety net and fundamentally support this idea.

The importance of a financial reserve

During times of crisis, such as during the 2020 pandemic, many faced unexpected difficulties. The lockdowns led to mass shock and uncertainty. Nobody knew how long this period would last, when working was impossible, conducting business became challenging, and expenses for rent and daily needs remained. It is in these moments that the need for a financial "safety net" becomes particularly acute.

Real-life example

When the crisis of 2020 hit, caused by the pandemic and subsequent quarantine measures, people were faced with a series of problems. There was no clarity on how long they would have to live under restrictive conditions. The inability to lead a normal life, work, and grow their businesses forced everyone to seek survival strategies. During these periods, having a financial buffer becomes a crucial factor in maintaining one's standard of living and ability to purchase necessary goods, especially food.

Financial stability and future planning

In analyzing my financial situation, I focused on evaluating the resources I have and determined how long they would be sufficient for. After careful calculations, it turned out that my savings would last for more than 5 years. In other words, even if there is a prolonged period of economic downturn or a "freeze" lasting two decades, my financial resources would be enough to sustain life without the need to seek additional sources of income. This approach underscores the importance of saving and creating a financial reserve for unforeseen circumstances. I have always advocated for the need to set aside funds "for a rainy day," and the more savings you have, the more at ease you can feel during times of uncertainty.

Financial stability and investing during a crisis

Having savings for a "rainy day" is important as it contributes to increasing feelings of peace and self-assurance. However, doubts may arise about where it is best to invest these funds. On one hand, losing money is always unpleasant, but on the other hand, one must be prepared for various economic fluctuations. For instance, during the onset of military actions in Ukraine on February 24, when the crisis erupted, many investors felt uncertainty and fear. This period highlighted the importance of being prepared for unexpected situations in Estonia and having a strategy to protect one's financial assets.

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