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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. Real estate is usually consisting of the buildings and the land on which these buildings are built on. There are various types of real estate. However, property is usually considered to be the same thing with the residential real estate. Some people find the two areas to be confusing. It is nowadays normal to determine the level of development of a town based on their real estate market. Various factors are responsible for the success of real estate. Demographics of a place is one of the pointers of the housing market. The information about the composition of the population comprises demography. This will involve the age, race, gender, and income among others. Migration and population growth are other important aspects of demographics. Pricing of assets depends on these factors. The price of a property is dependent on its demand. The demographic factors, in turn, affects the demand. A major demographic shift will have an impact on real estate market. The next factor is the interest rates. There is a significant effect brought about by the interest rates on the real estate market. The ever changing interest rates can hinder someone from purchasing a residential house. This is why a person willing to buy a house is always advised to research on the interest rates using a mortgage calculator. The cost of mortgage usually rises with the rise in the interest rates. A rise on the interest rate has a consequential effect of decreasing the demand and price of a property. Decrease in demand has a negative effect on the real estate industry.
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The economy is the other pointer. The housing market is substantially affected by the situation of the economy. An economy is measured by the GDP, employment pattern, manufacturing activity and the prices of goods and services. A slow economy will support a slow real estate market. 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 again is as a result of other factors coming into play.
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Finally, government policies or subsidies also play their part. The prices of property can be influenced by government actions. Actions of the government that boost the real estate are the tax credits, deductions and subsidies. This lower the prices of the real estate properties and hence boosting the demand. There will be a fall in demand if the government decides to increase the taxes. The result of this is the fall in demand for the properties.