A real estate market is a collection of land and the buildings that are placed on it. It includes residential, commercial and industrial properties, which are used for housing, business or recreational purposes. Real estate can also include natural resources that are contained within the property boundaries, such as water, minerals and crops. The market operates similarly to any other goods market, with supply and demand influencing prices (Cambridge Business English Dictionary, 2021; Investopedia, 2022).
The real estate market is complex. It involves multiple parties, from the owners of land and buildings to brokers, investors and agents. Owners of real estate purchase and sell property to meet their own needs. These may include buying and selling to realize a profit or using it for their own use, renting it out or leasing it. Other buyers and sellers include developers, who create land for buildings to be sold in the market, and renovators, who supply refurbished property to the market. Brokers, investors and agents play an essential role by facilitating transactions between these various parties.
Real estate markets are affected by a variety of factors, including economic trends and policies, which influence the demand for and values of property. For example, changes in interest rates can impact the cost of borrowing, thereby affecting property investment opportunities. Governmental regulations and laws, such as zoning ordinances and taxation policies, can also affect real estate investments. These policies can change the attractiveness of specific locations or types of property, as well as the profitability of investment strategies (Cambridge Business English Dictionary, n.d.).