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Disadvantages of high property price

Disadvantages of high property price

The increase in real estate prices is hailed by most people especially the home owners as this adds value to the homes and people get richer without much effort. But there are also the people who suffer due to high property prices. Let’s discuss the disadvantages of high property price.

Rich poor gap increases

High house price results in widening the rich poor gap as money moves into few hands. Due to high property price rich get richer and poor get poorer. This brings unbalance in the society and leads to social unrest.

Construction activities stall

The high property price decreases the profit margins of the builders due to which construction projects are stalled. High prices even make it difficult for the individuals to build their own homes. Therefore high property price is bad for the construction sector.

Home ownership declines

Due to high property price home ownership decrease. This is because first time buyers have to save more money for the deposits to buy a home. Worldwide home ownership is low in the regions with high property price.

Key workers suffer

Key workers like teachers, drivers, doctors and engineers are the backbone of every society. Due to high house price, key workers cannot afford to live in the city centers and therefore move to peripheries. This increases the travel time and whole society suffers.

Incomes of realtors decline

Commissions on real estate transactions are the bread and butter of the real estate agents. Due to high property price, real estate transactions decrease. The low real estate transactions mean low income of the real estate agents.

Mortgage payers suffer

High property price is always followed by a price crash. People who have bought homes in high price era find that the value of their homes is less than when they bought. This increases the suffering of home owners as they have to pay more mortgage than the value of their homes.

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(7) Comments

  1. Muhamamd azeem uddin

    on   said 

    Discourage people of hard worker :

    It is common believe that due to hard work one can become rich and spend their life in beautiful and prosperous manner.

    However once when become graduate and join job only 25 to 40 thousand salary then this kind of people think that they can not buy home even to work like this whole life. he thinks that their parent dont have sens that is why from childhood they have motivated him work hard,, read books,, spend life honestly like him,,

    However when he see the others are making money due to il-legal means ,, this encourage and motivate people to do corruption. This is the main causes the young generation are become more hunt to take bribery once he get job specially in any government organization and wherever he get to do corruption.

    if someone not agree then kindly ask any Clearing and forwarding agent that the new appointment young generation , how much they are paying money now and before , and how they provide lame excuses for money.

    sir this is reality now if someone feel bad , i also feel bad to write it , but sir this is reality ??

    my point of views is that the government must focus to live EASY LIFE,, like , low cost on merrage ceremony,,, free health facility, high taxes on above 1300CC cars, low cost housing scheme , like behria town,, and ,many ,, many ,, ideas,,

    Otherwise things will be more dipper bad situation.When a person spend 50% of the salaries on rent then it is understood how he will be able to absorb other expenses ???

    government have fix salary Rs15000/ for labor,, any one can make budget from this amount??? please

    Reply
    • Muhammad Azim Uddin
      This is called unbalanced distribution of wealth. Which results in increasing crimes and social unrest. People working on minimum wage Rs. 15,000/-. Even people earning 1 LAC per month cannot afford a decent home. This is due to the high unaffordable property prices. High property prices have many disadvantages.
      To control the property prices, government should make the policies. Government should start developing affordable housing schemes across PAKISTAN. People who cannot afford high rents should be given housing benefits. Unless government takes actions, home ownership will keep declining whereas renters will increase.

      Reply

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