Factors Affecting the Real Estate Market

Factors Affecting the Real Estate Market

Factors Affecting the Real Estate Market

1.The role of demographics

There are certain categories in demographic data that may have a direct impact on the real estate sector. 

For example, the socioeconomic status and  age group of the general population.

If the people are earning well and they belong to the upper-middle-class, middle class, and elite class, they will have a positive effect on the real estate market of the country.

The reason behind this positive trend is because these socioeconomic classes have high purchasing power which means high sales for the real estate market.

2. Interest Rates on Loans and Property

People despite high taxes and interest rates on property and for all legitimate reasons. This is an expense they want to minimize.

Interest rates play an important role in the growth and development of the real estate market. If the government is levying higher property taxes, people will become reluctant while investing. They will not buy real estate due to high taxes, instead, they will focus on other small business ideas in Pakistan. They may also consider illegal means to invest in real estate, just to get away from taxes.

However, if the government is providing tax credits to property holders, the sale of property will eventually increase.

Similarly, if the banks of the country are giving loans on easy terms and conditions, people will get loans and invest in real estate. Fortunately, Pakistan is one of the countries that has a large list of banks that offer home loans, but so far high-interest rates have made the situation very challenging for a salaried person looking for a mortgage.

3 The Economy

The economic condition of the country is extremely important. If the economy of a country is stable, it will attract investors. As a result, the real estate market will swell by leaps and bounds.

If the country has good GDP, job security, financial stability and high purchasing power, its people will be able to invest in the real estate market.

And here is a fact.

No matter how much you market your real estate projects, people do not want to put their money in crashed economies. In short, a healthy and stable economy is the foundation of a growing real estate market.

4.Government Policies

The legislative generally plays a major role in determining property demand and prices, with deductions, subsidies and tax credits being some of the ways in which the government can temporarily increase real estate demand. If you are hoping to determine changes in supply and demand and identify potential false trends, it is important to know about the incentives of the current government.

Posted in Real Estate.

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