How Can The Economy Of A Country Affect The Real Estate Market?

by

Stan Edom

Several factors can either drive up or down the potentials of real estate investment. Some of them are:

1). Corruption:

When a government official re-routes a country’s fund to his/her personal care, the next best place they plan to hide the theft, is in acquiring landed properties. As a result, they walk into location A, where the original general value of lands there are =N=15,000,000 ($75,000). When the real estate agents realise it’s a quick purchase to probably hide unaccountable funds, they spike the price to about =N=45,000,000 ($225,000). The corrupt public official, with little time to weigh multiple options, makes a quick decision and settles.

As soon as word goes out that a certain property worth=N=15,000,000 ($75,000), was sold for =N=45,000,000 ($225,000), every other similar property in that district’s value rises to about =N=25,000,000 ($125,000) to =N=35,000,000 ($175,000).

2). High Interest Rates:

If the cost of getting a property purchase loan from a bank is high, demand in properties would drop. The reverse is the case in the event of favourable interest rate.

3). Relocation Trends:

This has to do with where various people are relocating to, or from. As people quickly move away from a place, the value of properties there drop, and the value of properties in the area they are moving to, slowly rises.

4). Rental & Homeownership Rates:

If the rent-cost of a place is too high, a lot of people would find cheaper places to live. The same applies to home purchases. The cost of the properties will determine if there’ll be a surge in demand or not.