Question

Which macroeconomic factors make real estate have low or high demand.

So, this relating to the topic of Supply and Demand, Consumer Demand, and Supply decision.

Answer 1

Demographics are the data that defines a population's composition, such as age, ethnicity, gender, employment, patterns of migration and population development. Such figures are a widely ignored but important factor influencing the price of real estate and what types of properties are in demand. For many decades, significant changes in a nation's demographics can have a huge effect on real estate patterns.

Interest rates are also having a huge effect on the real estate markets. If you are considering buying a house with a mortgage, studying interest rates using a mortgage calculator would be helpful. Changes in interest rates can have a major effect on a person's ability to buy a residential home. That's because the lower interest rates go, the lower the cost of getting a mortgage to purchase a house would be, generating a higher demand for real estate, which is driving up prices once again.

Another key factor influencing the valuation of real estate is the overall economic health. In general, this is calculated by economic indicators such as GDP, job results, industrial activity, consumer prices, etc. Broadly speaking, so is real estate when the economy is slow. Yet economic cyclicality can have varying effects on various forms of real estate. For example, if a REIT has a greater percentage of its investments in hotels, an economic downturn will usually impact it more than a REIT that had invested in office buildings

Legislation is yet another aspect which can have a direct effect on the demand and prices of assets. Tax credits, deductions and discounts are some of the ways the government can temporarily raise demand for immovable property as long as it is in place. Being aware of current policy policies will help you evaluate shifts in supply and demand, and recognise patterns that might be incorrect.