3 Things that Increase Property Prices
Rising property price is hailed by everyone as it leads to the wealth creation and economic boom. On the other hand property price crash is discouraged as it’s the sure sign of wealth decline and recession. But the real thing is to find the reasons behind the house price increase as they give good idea about the right time to invest in real estate. This blog describes the top 3 things that increase property prices.
Low Interest Rate
The first thing that causes the real estate prices to increase is the bank interest rate. When interest rate is high property prices fall and when interest rate is low property prices increase. This is because the fall in interest rate means low profits on fixed deposits. So people withdraw money from banks and invest in real estate. High demand and low supply increases the property demand which leads to property price increase.
There are 47 mega cities in the world as people are shifting from rural areas to cities for good paying jobs and better educational, medical and recreational facilities. All major cities have limited land but booming population. The population growth increases the property demand as people need the homes for living and offices for businesses. Therefore the second thing that impacts the property price is the population growth.
Economy of a region plays a major role in determining the property price. By observing the major economic centers around the world like New York, Hong Kong, London, Tokyo, Sydney, Beijing, Shanghai, Paris, Istanbul or Berlin, we can observe the high real estate prices. This is because people are always willing to relocate for the good paying jobs. This settlement increases the property demand and ultimately prices increase. Therefore the third major factor that increases the property price is the economic growth.