Real estate or diamond, what is the best investment?

  • The best investment until 2008
  • The sustainability of the real estate market
  • Diamond as a stable investment

For many decades, it was said that investing in real estate was the safest investment. The value of a house or apartment would only increase and so would your profit upon sale. Nowadays, however, there are other ways of investment that are more sustainable and more cost-effective than real estate. Raw materials have become one of the best investments, although the course of not every commodity is equally stable. The instability of the housing market has a number of important causes. 

The best investment until 2008

In the period prior to the 2008 credit crisis, real estate was not only a practical but also one of the most profitable and best investments. Annually the house prices would increase slowly but surely. Real estate was not only accessible for specialized investors but also for individuals who want to invest their savings in a meaningful way. Therefore, the house prices rose between 1995 and 2008 with 175%. The credit crisis in 2008 brought some changes. In the United States, the real estate bubble exploded when the market stagnated and many families could no longer pay off their mortgage, resulting in an over-supply on the housing market. The demand decreased while the supply increased, resulting in a big price drop. This American crisis also had strong consequences in Belgium and the other European countries. The real estate prices declined by over 16% in less than 4 years. The best investment was suddenly loss-making.

The sustainability of the real estate market

In the housing market, it is so that a vacant house loses value because it is not kept maintained. This is in big contrast with, for example, investing in diamond or other raw materials. Due to this property, many owners are prepared to sell their house for a lower price after a period of time. The real estate market is therefore making losses and is no longer the best investment.

Diamond as a stable investment

Many raw materials have a certain expiration date and can only be kept in the investment portfolio for a limited period of time. Diamond, like gold or silver, does not have an expiration date and is consequently better resistant against crisis. The big advantage of an investment in diamond is that the investment requires a limited amount of care. Coffee or crude oil must be stored which ultimately adds to the cost, while diamond also has a practical and aesthetic aspect. Who wants, can process the investment diamond in a jewel or exhibit it at home.

Additionally, diamond does not have an investment bubble that can explode. The offer is stable and the demand is always bigger than the offer, which makes the prices increase steadily. Experts predict a stable and positive growth for the coming decades, making diamond the best investment.

Who has questions about a spread of the investment portfolio can always contact the experts of BAUNAT DIAMONDS. Contact us without obligation. 



Author: Daan Deruyter