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The Challenges Faced by the Global Real Estate Marketplace and a Solution

Real Estate

The global real estate market has gone through a major phase of development over last 10 to 15 years. Investors around the globe are in the process of looking for lucrative ventures to be part of. However, at the very same time, they are at battle with low-yielding profit margins and low returns. There’s a belief that the real estate industry is one of the fastest growing industries across the globe, but there are certain issues and challenges that the industry faces and has to overcome in the long run.


Political uncertainties

The real estate industry is usually affected by any political crisis a country might be facing. With changing regimes, there might be shifts in policy as well. These changes have an impact on the investment in that country. In many cases, these changes affect the real estate sector, directly or indirectly. These new policies that are introduced can affect the overall market dynamics and have an impact on prices.

Interest Rate

All major industries around the globe are being affected by the increasing interest rates in their respective countries. The real estate industry gets quite easily affected by these changes in the interest rate. This leads to an overall raise in property prices, along with decreased investment.

Lack of awareness

This is one of the major factors when it comes to the real estate industry. A majority of people starting their journey as real estate investors are not aware of the dos and don’ts of the real estate industry. There are a number of companies that are led by individuals who aren’t aware of the property market situation and mostly work using their gut feeling. There are a number of mistakes that new market entrants should avoid while they’re a part of the industry, and should try to educate themselves of the ongoing market trends.

Restrictive bank lending policies

Banks have tightened their lending policies when it comes to individual investors. This has led to a marketplace where there is excess inventory and fewer buyers in comparison due to strict loan guidelines. 

Regulations

Various government regulations have a widespread and unintentional effect on the overall real estate market in every respective country. Globally, there is a need for regulations, but these lead to more considerations for lenders, buyers, agents and property developers to keep in mind.

Infrastructure

There has been widespread global criticism of governments due to their alleged lack of effort towards developing proper infrastructure. New housing developments require properly planned water and power supply facilities. These are especially lacking in a number of Asian countries such as India, Pakistan, Nepal, etc. To find properties of the sort where proper facilities are available, there are multiple online property portals like prop.pk and housing.com.

For all the problems faced by the real estate industry, there’s an opportunity for growth and development for the masses out there. The government of each country should have a strong role to play in developing this sector.

Governments around the globe, when coming into power, should ensure they maintain the trust of the investors on their end. The more the investment, the better the flow of money in the economy; leading to better economic conditions and overall development.

While passing their respective annual fiscal budgets, governments should have a policy for lowering the interests rate to increase the overall spending from investors. Investment-friendly budgets and political reforms lead to a stronger and more productive economy.

The government and private sectors should both work on educational and awareness programs for investors, real estate developers, agents and lenders on the policy front. This would lead to better awareness and understanding of the market, benefitting all the relevant stakeholders.

Any regulations put in place by the government should be progressive in nature rather than be uniform for all investors, whether on the big or small scale. This would lead to a more regular of investment in real estate coming in from smaller investors, who form a larger chunk of this sector. In addition, the state should work on the basic provision of infrastructure and development of new projects for the masses. This will help in the improvement of not only living standards, but will also create more trust in the investors since the government would be taking a positive interest in the field of real.

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