The real estate market encompasses all aspects of buying, selling and using property for investment or living purposes. It is a global industry that includes residential, commercial and industrial properties. It is influenced by many factors, including economic conditions, government regulations and demographic trends. The real estate market also is impacted by market cycles, which consist of expansion, plateau and contraction phases (Colliers International, 2021).
Local and general economic conditions impact the supply and demand for property in a particular area. For instance, if incomes in an area increase, people may have more money to spend on housing and thus drive demand for residential real estate. The emergence of new jobs can also drive demand for commercial real estate as companies need to rent office space to accommodate their employees. Real estate investors stay informed about property prices, new construction, mortgage rates and the economy to identify potential opportunities in their chosen markets.
Real estate investors and developers are influenced by government policies and regulations that influence how land can be used, which property types can be built and what infrastructure development is required. This can have a direct impact on the profitability of a project and therefore should be taken into consideration when making an investment decision. Governments also play a key role in protecting the interests of consumers and investors through fair trading practices and ensuring sustainable development of the real estate industry. This includes implementing taxation laws, zoning regulations and infrastructure development.