Gold outperforms real estate in Izmir as inflation impacts real returns

Recent investment data and expert analysis highlight a divergence between nominal gains and real purchasing power in Turkey. In Izmir, gold has emerged as a top performer, providing a 16.49% real return against inflation. Other assets, such as government debt securities and deposit interest, saw much lower real gains of 1.39% and 0.56%, respectively. Meanwhile, stock market and foreign exchange investments failed to keep pace with inflation.

Despite rising nominal prices, the real value of real estate has declined. While housing prices in Turkey rose by 25% annually in nominal terms, inflation resulted in an approximate 5.1% real loss for property investors. In Izmir, although the market remains one of the most expensive in the country, the increase in TL-based prices has not translated into increased purchasing power for homeowners.

Real estate expert Mert Başaran noted that while gold has seen a massive 200% increase in dollar terms over the last two years, it may enter a period of horizontal movement over the next six months. He suggested that those holding gold might consider transitioning into real estate, particularly to meet housing needs, as gold cannot fulfill the fundamental requirement of shelter.