How The Ecomony Affects The Real Estate Market?

[Daniela_grefi]

Real estate is not every ones cup of tea. It is a challenging task to run a real estate company and one has to be extra careful in doing the tasks. Good planning and knowlegde are something that one should have to run a successful real estate company. The one problem that every real estate company faces is a downside in residential real estate. When the nation and the economy is struggling often the home sales tend to fall. No matter how active a real estate company is a sluggish economy can put strain on them easily.

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[bryant.coleman]

Real Estate prices go down really hard, when the economy is in a downward spiral. Look at the situation in 2008-09. During that time, the prices for houses, apartments and residential plots went down by an average of 30-40% in the United States. In places such as Dubai and Sharjah, it went down by as much as 60%. Stay away from real estate in the emerging markets, in case of an economic slowdown.

[sherbyspark]

I have had some experience with real estate markets and I feel the price hugely depends . Firstly the economic slowdown definitely affects the price , but it varies from country to country . Not all countries might see a huge downtrend . If you have noticed the prices of real estate in China and India have more than Quadrupled in the years between 2000-2012 , so the fall doesn't really hit them that hard except for people who got in towards the end. The major cities in these countries are also overpopulated so the price is likely to increase again in the future due to demand after the economy becomes stable again .
If you compare US to these countries then real estate company which just buys real estate for investments aren't really running in the manner of holding the real estates just to sell them later and its definitely not the best business to get in. However going into the commission based sector would likely pay off more.

[bojan92]

In my country even in the time of economy crisis the prices of real estates were the same as they always were. I don't know what would happen if the economy get better maybe the real estate prices will be bigger i don't know

[botany]

Real Estate prices go down really hard, when the economy is in a downward spiral. Look at the situation in 2008-09. During that time, the prices for houses, apartments and residential plots went down by an average of 30-40% in the United States. In places such as Dubai and Sharjah, it went down by as much as 60%. Stay away from real estate in the emerging markets, in case of an economic slowdown.

In emerging markets, underwriting standards of banks are much more stricter than those of developed economies. Moreover, you can count on the government to intervene in the case there is a threat of market collapse. I would say the London real estate market is overheated now.