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Factors Driving the Real Estate Market. Real estate one of the industries that are performing very well in the world of business and investment. Real estate stands for all the property that cannot be easily moved. Buildings and the lands they stand on comprises the real estate. There are various types of real estate. However, the most prominent category is the residential property.The residential real estate is, however, the most common. Most people do not know their difference. The success of real estate is nowadays used to determine the growth of a given area or city. Many factors come into play to ensure the success of real estate. One of the major factors that drives the real estate market is demographics. The information about the composition of the population comprises demography. They include income, gender, race, age among others. Migration and population growth are other important aspects of demographics. The information about the composition of the population plays a role in determining the prices of property. The pricing of a property will depend on demand. The demand, on the other hand, rely on the demographic factors. The real estate will feel effect of a major shift in the demographic factors. The interest rates are another factor that dictates the performance of the real estate market. The interest rates impact majorly on the real estate market. High interest rates can block someone from purchasing a house. Calculating the interest rates using a calculator is significant before buying a house. The rise of the interest rates causes the cost of obtaining a mortgage also to rise. This will have an ultimate effect of lowering both the demand and the prices of the real estate. Decrease in demand is a low for the real estate market.
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The third factor that influences the real estate market is the economy. The status of the economy influences the real estate market. Measures of an economy are the GDP, employment data, manufacturing activity and the prices of goods and services. A real estate may be stagnant as a result of a stagnant economy. A growing economy will support the real estate industry. However, there is a possibility that some types of real estate will not be affected by the same scenarios. This is the case due to the effect of some other factors.
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The final key indicator of the real estate market is the government policies or subsidies. The prices of property can be influenced by government actions. Tax credits, deduction, and subsidies are the policies used by the government in support of the real estate market. This lower the prices of the real estate properties and hence boosting the demand. Increasing the tax imposed on the real estate companies will have a negative effect. This will cause an increase in the prices of the properties with a consequential decrease in the demand for the properties.