by Homy Invest
As a matter of fact, the real estate market is going into recession globally where it has begun early 2019. However, many developers are still at the denial stage where they will notice very soon, how difficult to rent or sale a property or even how to finance a new development!
Many experts are trying to justify this period as a market correction, or as an impact from the wall street/mortgage crisis. In fact, there are many reasons everyone can com up with, but the common factor between all those reasons is “GREED”
Unfortunately, very professional developers, planners, accountants ignored the common sense of middle class capabilities to rent or buy or even to finance an investment by expensive properties relaying on 10% rich people. Moreover, the greed to have a very short pay-back period with high margin of profit is a vital factor especially with the mass unemployment or laying off people as the economy is a the down cycle.
Despite that fact of down cycle of economy right now, some developers think it is going to be short, but it wouldn’t. Due to many intersecting factors the down-time will last for at least 3 years till it picks up itself from the GREEDY investors, developers, where they will start responding to the market capabilities; in other words, working class people ability to rent or buy a property…
Basically, the real estate market is going towards a very difficult era globally where locally some governments will interfere as a temporary “pain killer” where it needs a permanent solutions to limit the greedy ambitions of some people in the realty sector and to start focusing on industrial properties, medical properties, giving the middle class (which is more than 80% of economy total strength)rescannable prices and easy financial options…
If you look over strong market during the financial crisis, they have placed many regulations to control prices, inflations, and values of properties to limit the collateral damages in 2009 like USA market and in 2013 there were good signs on the market, but due to ignoring the middle class situation ( less salaries,no job creation, and laying off employees) the market got into another complicated cycle which is cash flow shortage…
Currently, the recovery period will take longer time than before as it wasn’t recovered completely from the first wave. Companies are still laying off to reduce overheads, people are afraid on their job security, owners/developers are still demanding high prices, so as long as this triangle is still happening, the inflation will increase and the economy will reach to the ZERO point or over demand units…
Many countries are trying to bump some cash-flow or tender new projects or get some national mission as a catalyst to support the realestate market; however, till this moment, all of these activities are temporary measures to delay the breakdown again similar to 2008 crisis…
Wait our next article about the possible solutions for the realestate rescission which is going to surprise you how easy and painful are they…
