Property market

[edit] Introduction

The property market is the state of all the transactions (buying, selling and transferring) and the activities (e.g property development) which relate to property, whether in the residential, rental, retail, commercial, industrial or other sectors. In the US, it is called the real estate market. However, more often than not, the term property market is used to infer the housing market and the health of both or either is a frequent topic of national speculation and an indicator of the state fo the wider economy.

When the totality of all the transactions is positive and rising, the property market is said to be healthy or bullish. When it is depressed with few transactions, it is said to be sluggish or in a slump, in the doldrums or a bear market. Other sectors of the economy may be affected by the property market, including housebuilding, offices and other commercial building, the rental market and the D-I-Y sector.

The health of the property market is linked to a host of factors which include levels of investor confidence (domestic and foreign), supply and demand, including the number of homes being built, interest rates and the availability of finance, employment/unemployment, taxation, political developments and stock market activity. Some of these factors can be interdependent.

[edit] Price behaviour

UK house prices have seen dramatic rises – often to seemingly unrealistic levels – followed occasionally by dramatic falls. Sometimes it is not possible to get a homogeneous national picture of property market conditions: as an example, the UK has seen a split in the housing market with strong activity in the north and challenging conditions in the south.

However, rising prices alone do not necessarily mean a heathy market: it is possible for annual house price growth to edge up by say, 2% yet the market still be subdued, perhaps due to a lack of confidence prevailing in the economy, or the prospect of future negative events impacting the market. Also, the housing market may be depressed but the demand for commercial office space be high and, as a consequence, induce a spate of tower block construction.

Property markets generally benefit where there is availability of independent research and transactional evidence, both of which help give domestic and foreign investors greater confidence regarding market conditions and a basis from which to proceed. In recent years the UK housing market has hugely benefitted from numerous web-based services which give free advice on property prices and market conditions. When a homeowner can see that similar properties in the locality have sold for a certain price, they are more likely to put their property up for sale with confidence.

There is a misconception that a rising property market is good for property owners - particularly the owners of housing. Generally, when people move house, they move from a less expensive to a more expensive property, and so high prices will actually be detrimental to them. It is only when an owner is down-sizing, moving to a less expensive area, or exiting the market altogether that high prices are beneficial.

For more information see: Housing ladder.

[edit] Related articles on Designing Buildings Wiki

• Building.
• Commercial premises.
• Commonhold.
• Common land.
• Estate.
• Equity and loan capital for property development.
• Freehold.
• Glossary of property law terms.
• Housing ladder
• Housing tenure.
• Investment property.
• Land.
• Land acquisition.
• Leasehold.
• Mortgage.
• Owner.
• Premises.
• Place.
• Property chain.
• Property development finance.
• Property marketing.
• Property ownership.
• Property rights.
• Property valuation.
• Off-plan property.