Categorized | Finance and Mortgage

High prices of real estate property caused by high rates and input costs

High prices of real estate property caused by high rates and input costs
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The high prices of real estate property have been attributed to the high interest rates charged by the financial institutions and the high prices of building materials. Prices of houses and other property are increasing day in day out with a monthly increase of over 1 percent.

In the wake of the global economic crisis, interest rates remain high despite reports of recovery. Additionally, prices of goods and services keep going up. Building materials and cost of building labor is also very high. These factors are responsible for the high prices of real estate property. Though prices in general are high, now buildings even cost more.

Apart from paying more for the properties, going for a loan from the financial institutions is bound to compound the situation. This is because their interest rates are also high and so you pay far more for a property than you would have in a few months past. Property owners offering their properties for rent also take advantage of the situation to increase their rents.

This is not an encouraging situation and is deterring people, especially first time buyers from buying homes. Real estate agents say that, their sales have reduced drastically and also that only a few first timers come to buy properties.

Banks also complain that there has been an increase in the number of unpaid and overdue loans, compared to previous years. Real estate fraud is also said to be on the increase as some criminals are taking advantage of the situation.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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