We have long known about the appetite for political power over the real estate market. It’s like that a little around the world. For example, in the United States, the rates of selling a home are greatly affected by the turn of political power as the economy adjusts to the new political system.
The economy is one of the factors that most influences the real estate market and it is necessary to stay aware of the situation to better plan for the months to come.
The changes in the country’s economy are reflected in the most diverse markets, including real estate, which feels every change and always needs to adapt in the long term. Much is said about improving the environment for the new year when it comes to buying a property. Some interest rate drops help to create better expectations and optimistic forecasts for 2018.
The Impact of Inflation on Real Estate
One of the points that best represent the economic factors that can influence the real estate market is inflation. In a downturn phase after 2015 with the high of the crisis, the retraction helps to heat up the business. The target for 2017 is 4.5%, down from 7.2% in 2016 and 10.7% in 2015.
The real estate industry tends to resume growth in the long term, as it is a sector of expensive and more complex goods. It is believed that 2018 will be the year of recovery for this market due to some signs that we could see this year.
Read also: What Does Political Economy Mean?
Falling Interest Rates
Another point this year was the slowdown in interest rates, this helps to increase demand, as buyers feel confident in taking out a loan from the bank. In addition, the raising of the financing ceiling with FGTS resources is a factor that helps to bring more spirit to the buyer, who feels insecure due to unemployment rates.
Banks also provided facilities to assist in the demand for credit for real estate purchases. Nowadays it is easier to find loans with lower interest in order to help those looking for an opportunity to secure their own home. Banks expect that in the long term even more people will seek credit for real estate purposes.
Final Thoughts
The combination of all these economic issues such as falling interest rates and facilitating credit by banks end up reflecting on the market, as home ownership is still the dream of most citizens all over the world. With purchasing power resumed, the population returns to consuming and injecting money from the country’s economy, in addition to seeking to fulfill their desire to own their property. This type of decision is only taken after the feeling of security that people have when they are formally working.
Due to this combination of factors, a more pleasant scenario is expected for next year after two difficult years in the real estate market, which has been gradually recovering in recent semesters.