The economy is weak and the market is not expected to grow further throughout the year. Although inflation has exceeded wages, mortgages are still cheap, but a burden.
Joseph Nguyen March 13, — The size and scale of the real estate market make it an attractive and lucrative sector for many investors. This article will look at some of the main factors that affect the real estate market and the variety of investments available.
Factors That Influence Real Estate Demographics Demographics are the data that describes the composition of a population, such as age, race, gender, income, migration patterns and population growth.
These statistics are an often overlooked but significant factor that affects how real estate is priced and what types of properties are in demand. Major shifts in the demographics of a nation can have a large impact on real estate trends for several decades.
For example, the baby boomers who were born between and are an example of a demographic trend with the potential to significantly influence the real estate market. The transition of these baby boomers to retirement is one of the more interesting generational trends in the last century, and the retirement of these baby boomers, which began back inis bound to be noticed in the market for decades to come.
For more on the baby-boomer trend, see Boomers: Twisting The Retirement Mindset. There are numerous ways this type of demographic shift can affect the real estate market, but for an investor, some key questions to ask might be: Or ii How would this affect the demand for larger homes if incomes are smaller and the children have all moved out?
These and other questions can help investors narrow down the type and location of potentially desirable real estate investments long before the trend has started. Interest Rates Interest rates also have a major impact on the real estate markets. That is because the lower interest rates go, the lower the cost to obtain a mortgage to buy a home will be, which creates a higher demand for real estate, which again pushes prices up.
When interest rates decline, the value of a bond goes up because its coupon rate becomes more desirable, and when interest rates increase, the value of bonds decrease. When interest rates increase, the yield on an REIT becomes less attractive and it pushes their value down.
The Economy Another key factor that affects the value of real estate is the overall health of the economy.
This is generally measured by economic indicators such as the GDPemployment data, manufacturing activity, the prices of goods, etc. Broadly speaking, when the economy is sluggish, so is real estate.
However, the cyclicality of the economy can have varying effects on different types of real estate. For example, if an REIT has a larger percentage of its investments in hotels, they would typically be more affected by an economic downturn than an REIT that had invested in office buildings.
Hotels are a form of property that is very sensitive to economic activity due to the type of lease structure inherent in the business. Renting a hotel room can be thought of as a form of short-term lease that can be easily avoided by hotel customers should the economy be doing poorly.Economic factors affecting the housing market (Article based on a presentation to the Australian Financial Review’s Housing Congress in Melbourne on Thursday 8th March , and published in the AFR’s op-ed pages on Monday 12th March) Australian residential property prices have shown remarkable resilience despite.
In this essay, I will examine the factors that determine the price of houses in UK housing market.
Firstly we will have a look the past and the recent history of UK housing market. The UK housing market has been booming in the past few years, with prices rising much faster than household incomes. “The real estate market looks a lot different than it did even three years ago,” says Rachel Drew, a research analyst for the Joint Center for Housing Studies at Harvard University.
A look at factors affecting the demand and supply of housing. In summary, some of the main factors include: 1. initiativeblog.com incomes mean that people are able to afford to spend more on housing.
The size and scale of the real estate market make it an attractive and lucrative sector for many investors.
This article will look at some of the main factors that affect the real estate market. Factors Affecting Housing Market Financing - Most consumers have to borrow from a lender in order to afford the purchase of a home.
When banks get stricter on loan approvals, fewer houses get purchased.