What determines the price of real estate, it will be cheaper or more expensive – care about this issue and the investors who buy property as an object for capital growth, and ordinary citizens who want to improve their living conditions. To answer this question, we need to know what influences the price of real estate. It seems to be affected by everything: the cost of cement, and earth, and the labor force, location and corruption. Robert J. Shiller is actively involved in the matter. Realtors and developers assure us that these components determine the price per square meter. But from a macroeconomic point of view on the price of housing affect only two factors – a buyer's creditworthiness and the interest rate on the mortgage.
The higher the solvent demand and lower interest rate, the higher the cost of housing, and, conversely, the smaller the population gets and the more expensive loans, the cheaper the property – and not let developers tell stories and Realtors about the cost of construction and land values – are secondary factors that formed the basis of real estate prices. The most important factor, as if a reference point that affects the price of real estate – is paying population. What average amount of money people can afford a monthly basis to provide for repayment of the loan on your property? Determine quite simply: how much is currently worth rental property – roughly the population and can spend to pay for property when buying on credit. If it is 20 thousand rubles a month, a man for 10 years at 20% per annum anuitentom can take a million. If only 10,000, the loan is not more than 500 thousand rubles.
The next most important element – is interest rate. When the same data, but if the interest rate was not 20% per annum and 10%, with 20 thousand people would have received a loan of 1, 5 million, while 10 thousand – 750 thousand can see that with increasing amounts of 2 times, we are a factor of 2 can increase the size of the loan, and if reducing interest rates by 2 times – only 50%. That is the size of the loan, primarily depends on the size of the possible payment by the borrower. By the way, if the cost of the mortgage was on par with the U.S. – 3%, then the same conditions for payment of 20 thousand could take nearly 2.1 million That's why real estate in developed countries so expensive. That is to understand what will happen to real estate for the foreseeable future is quite simple. If household income increases, if reduced interest on loans – real estate will rise. If rising unemployment, delayed wages, interest on loans rise in price month to month, then property prices will fall. But everything else is secondary!