The Real Estate Market can be a rather volatile industry that reacts to its country’s economic welfare and can even be greatly influenced by global economy. In times when the economy surges to a high, real estate values will as well; when the economy goes through a crises, the values of real estate collapse.
In countries where global investment plays a big role, the demand on real estate is influenced highly by the demand for properties by investors. During a global boom, the price of real estate properties will become higher. But, in the event of a struggling global economy, investors tighten their wallets and real estate values will drop.
This instability in the real estate market can have a big impact on any homeowner or potential homeowner. Interest rates fluctuate and influence the monthly payments on home loans and mortgages.
Governments do enact different measures to help stabilize the property market, to keep prices lower and prevent consumers to take out loans which can become unaffordable in the long run.
For most, average consumers, the buying of their home is a long-term commitment. However, investors and property speculators purchase properties to sell them again in two or three year’s time. Short-term buyers and sellers will have higher stamp duties to pay.
When governments can enforce the intended measures on the real estate markets, it would bring positive stability which will help both homeowners and investors.