The real estate market can be affected by many external events, such as changes in interest rates, natural disasters, changes in government policies, etc. Therefore, it is important to closely track the real estate market to make smart decisions about buying or selling real estate.
The real estate market is one of the favorite markets for investors, both individuals and professionals. This market has often been profitable for property owners as well as intermediaries (brokers, real estate agencies, banks, etc). With the exception of a few difficult periods, e.g. the 2008 real estate crisis, the real estate market is a low risk market.
Real estate investors focus on the long term. The more time goes by, the more real estate increases in value. This appreciation can have several causes:
The price of a property located in an urban area increases more quickly than one located in a rural area. Secondly, certain metropolises are attracting more and more people because of the opportunities they offer, such as Shanghai, New York and London. This explains why demand is increasing rapidly and prices are skyrocketing. Location is a very important criteria for investing in real estate, if you invest in areas with high demand, your investment will be more profitable.
This is one of the main factors that define the fluctuation of real estate prices. Central banks around the world set interest rates and this has a direct impact on real estate. If banks raise interest rates, the purchasing power of households decreases, and therefore, demand decreases. This leads to the devaluation of real estate prices. When banks decide to increase interest rates, it is better to wait for the market to be regulated before deciding to invest.
Many real estate investors have managed to expand their investments in a matter of years. A property can increase in value without notice. Some cities launch important projects (tourism, industry or other), and then the demand increases. The income from rental property can rise very quickly. In order to benefit from this, it is recommended to check the news on a regular basis.
The real estate market is a good investment for the long term. However, this market can be affected by several threats: new laws announced by governments, natural disasters (floods or others) or stock market crashes.