Real estate market is an economic entity consisting of a system of business participants, who interact to buy and sell property (Cambridge Business English Dictionary; Wikipedia, 2021). These include real estate agents and brokers, construction companies, mortgage banks, investment funds, and insurance providers. In addition, ancillary businesses, such as maintenance firms and building supply companies, benefit from growth in real estate demand.
The real estate industry is complex, and property transactions require extensive research, legal considerations, and financial commitments. As such, a thorough understanding of the real estate market is important for investors and developers to make informed decisions and mitigate risks (Knight Frank, 2022). Various factors drive trends in the real estate market, including economy, demographics, and government policies. For example, changes in interest rates can affect the cost of borrowing, impacting both buyers and sellers (Knight Frank, 2022). Demographic shifts also play an important role, with rising population density and changing household types fuelling demand for certain property types.
Moreover, the real estate market is impacted by macroeconomic events such as inflation, unemployment, and GDP growth, which in turn influence property demand and prices. Government policies, such as tax incentives, zoning regulations, and infrastructure development, can either create opportunities or limit them.
Lastly, real estate market dynamics are influenced by a variety of regional and local factors, such as crime rates, employment opportunities, school quality, transportation facilities, and municipal services. A deep understanding of these drivers is essential for property investors and developers to make informed decisions and optimize their investments (Knight Frank, 2022). Real estate markets can be divided into three primary segments: residential, commercial, and industrial. Residential real estate includes properties designed for individual or family living, such as single-family homes and apartments. Commercial real estate comprises properties intended for retail or office use, such as shopping malls and warehouses.
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