The real estate market is the buying and selling of properties, such as homes and commercial buildings. It is a complex market that is influenced by many factors, such as economic conditions, interest rates and supply and demand. It is also impacted by government policies.
The size of the world’s property market is enormous. At a global level, there are more than 7 billion people, and each of them expresses some demand for housing; shopping and working space; warehouse space for logistics; land to develop, expand, or expand existing buildings; institutional space for educational, health care, and government institutions; cultural and recreational amenities; and hotels.
A stable real estate market is important for society. It contributes to citizens’ social security and economic stability. Stable real estate prices are essential to ensure the development of other sectors of the economy and support sustainable economic growth. The stable operation of the real estate economy requires two hands of control: one is the invisible hand of the market and the other is the visible hand of the government.
Investors continue to show strong appetite for real estate. In the first half of 2021, acquisitions rose 34%. Property valuations have stabilized and are only 1% below pre-pandemic levels at a broad basis. This is the result of extraordinary government fiscal and monetary measures that have helped stabilize the global economy and thus supported real estate asset values. At the same time, demographic trends are shifting the demand for real estate. In particular, the retirement of baby boomers and smaller incomes and family sizes are likely to change demand for second homes in vacation areas.