Dangerous crisis waiting the global real estate market during 2020
The real estate market has been and will always be the main indicator of the state of the economy in the country, and reflects the extent and appetite to invest in it, so that the entry to that market has its own rules at the international level and specialized experts expect the best and worst markets around the world but the many investors and even individuals have become afraid of an international real estate bubble over the coming period.
Real Estate Bubble
We hear a lot about the term “real estate bubble” repeated over the past periods without knowing its significance and how it can happen and its seriousness, which can cause serious shocks to the global economy!!
This real estate bubble occurs when the demand for real estate is increasing accompanied by an increase in supply, causing more demand for investment and speculation in them, and therefore a sudden rise in real estate prices but at some point demand begins to decline, causing a sudden and sharp fall in prices followed by a series Of major bankruptcies that hit real estate companies and real estate finance to reach the economies of major countries and stock exchanges and gradually move to the rest of the world.
The Financial Times newspaper recently drew a disastrous perception of the global real estate market in 2020, warning of the beginning of a decline in demand for real estate in many international markets and major cities that were considered attractive for this type of investment during the past years, and attributed this because of the imposition A number of states have more taxes on real estate transactions, as well as tighter lending and financing conditions during the recent period.
The International Monetary Fund has also recently warned that property prices have begun to fall sharply in UK, which could gradually move to the rest of the world, with nearly a third of homes losing market value in parallel with the loss of nearly 18% of their purchase price from several years ago.
There are a number of factors that affect the demand in the international real estate market, and thus play an important role in determining the future of real estate prices globally, such as population preferences where the demand for real estate is often focused on large cities with infrastructure and modern services and distinctive in addition to proximity to Shopping and basic needs as well as the extent of political, social and economic stability enjoyed by that country always wants investors and even individuals to reassure the safety of their property and personal security as well as do not forget the rate of pollution and congestion, which has become one of the most important standards of competition in the Global Real Estate Market.
A future crisis
In parallel, experts in the US real estate market warned that the country is expected to hit a severe real estate crisis during 2020, especially in the first quarter of the year due to the decline in demand for real estate as well as high rates of lending to investors and citizens from the Federal Reserve and stressed that it is expected A recession in the market as a result will occur next year.
Despite the pessimistic view of the global real estate market during 2020, some experts have put the possibility of economic and political developments at the international level to reduce the current crisis, especially between the United States and China, which may encourage some investors to enter the real estate market strongly.