subject: Effect Of Recession On Real Estate Industry [print this page] Recession had its own disastrous consequences in many countries globally but it proved to be advantageous for some economies. It helped the investors to make their dreams come true by the reduced prices in real estate. Several sectors like tourism and travel, banks and aviation industry have been badly hit by recession. But, during the recovery phase, people in these fields are exploring ways to attract customers and increase their flow of business so that they can overcome the loss.
On the other side, the impact of recession in the real estate field seemed profitable for a certain extent to the builders and end users. Recession has given way for the current boom in the industry. Let us try to understand some of the facts.
When recession was hit, real estate sector faced a diminished demand. Even the higher income group who work in MNCs had undergone a sad phase because of layoffs by the employees to overcome the losses. Salaries of employees were cut down and the prospects for growth in professional field became nil. Ultimately the depression in the economy influenced the purchasing power of common man. And also, because of recession, sellers in real estate are not able to find buyers for their overpriced ventures. To handle the situation, consultants and developers took a strategic approach wherein they aimed for high volume sale and low margins. It gave way to several investors in the industry. This particular strategy gave rise to the concept of reasonable housing in which developers launched low-cost residential properties in all cities. It helped the builders to overcome their losses and encouraged the buyers to own their dream house at affordable prices. In fact, the recession made the prices of property prices stable, by putting a check on the monopoly of the builders who were charging exorbitant prices.
At the time of recession, it looked like the sellers had tough time while the purchasers had the advantage of low prices for residential and commercial properties. But presently sellers also take the advantage as prices are increasing considerably. Investors sell properties for high profit margins which they bought at lower rates during the economic crisis.
Moreover, banks offered lower interest rates during the recession. Several buyers may enjoy these benefits even now as few of the loans are fixed plans.
Recession has helped several buyers to invest in long-term affordable investments in real estate. As the crisis period is over, rental properties have started regaining their prominence. Job market is encouraging and more and more people are moving to cities. House owners have nice time as they again get a consistent flow of money.
We can infer that the recession has helped in balancing and restricting over pricing in real estate industry and gave way for a new beginning in all economies of the world. Harji Realtors is one of the leading real estate agents in the region of Chandigarh, Mohali and Kharar. For more information on great deals in 1 bhk apartment in mohali and the best Plot in Sunny Enclave check out our website.
