Factors that drive the real estate market

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Although real estate has the size and scale that many investors are attracted to, it still has some elements that need to be reviewed and carefully studied. The following are the fundamental factors that affect the business and the range of investments that can be made available for businessmen:

Demographics
Demographics is the data set that describes the composition of a certain population, taking into account such factors as age, income and purchasing power, migration patterns, and population growth. Often overlooked, these statistics are major determinants of how a property will be priced and categorized in a specific location.

Interest rates
Fluctuations in interest rates can have a major impact on a buyer’s purchasing capacity. As the interest rates fall, the cost to obtain mortgage to buy a home decreases, thus increasing the demand for and rates of real estate. The opposite happens when interest rates rise.

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Economy
Real estate professionals Melissa Yardy and Clarence Hasenbeck, would agree that the single most important element that influences the growth of real estate is the economy. A country’s GDP, employment data, and manufacturing activity, among other economic indicators, largely influence a person’s attitude toward buying properties. Expenditures are at their peak when the economy is at its most robust.

Government policies and subsidies
Especially in countries not using the laissez faire economic model, legislative policies impact property demand and prices. Tax credits, deductions, and subsidies are some of the factors that the government employs to boost the demand for real estate.

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Due to its position as one of the largest industries of any economy, real estate has become a hotspot for lucrative investing. Representing a large portion of families’ wealth, the industry has a valuation of nearly $20 trillion dollars in the American market alone.

This website is a helpful resource for people who want to know more about the real estate industry.