Gold or real estate – what is more crisis-proof?

A comparison between the value retention of gold and real estate.

Real estate is real and retains its value even in a crisis. People will always need a place to live and if a property is located in a reasonably intact and centrally located area, a loss of value is supposedly excluded. This could indeed be argued, but in this case the devil is in the proverbial detail. Real estate may have numerous advantages, but it is only of limited use as a crisis precaution.

What currently speaks for the purchase of real estate is the persistently low interest rate level. There is only one catch and this is the instability of the financial markets. Analysts have been anticipating a turnaround in interest rates since 2017, but this has not yet occurred. But at the latest after the key interest rates are raised by the US Federal Reserve Bank (Fed), interest rates will also rise in Germany. Many will then no longer be able to finance their property. And what happens next is easy to predict: more and more properties are being put up for auction or are previously being offered on the open market. The fact that other forms of investment become more attractive again due to the high interest rates reduces the chance of finding a buyer. In short: the bubble bursts, the real estate hype is over and prices are falling. What this means can be seen in the example of the USA, because the bankruptcy of the Lehman Brothers also resulted from a real estate crisis.

Against this background, gold is clearly the safe form of investment in times of crisis. Because gold and other precious metals offer both empirically and historically proven value retention. While real estate involves various risks, gold is a “crisis-proof” form of investment that does not lose its stable value even in the event of turbulence on the financial and currency markets.