Re: The great real estate race
PA.. chances of US real estate bubble bursting are focused more on a few key areas. In the rest of the nation while property values are high, the price to avg annual income ratio is not skewed the same way it is in Pakistan.
The money for investment propert coming in from gulf and europe will keep the prices stable in the short term.
lets look at it logically..and think of it from a supply and demand perspective as well as returns basis.
how many people will by how much property and what will they do with it, if u cant resell it at higher price then is it a good investment?
with fewer buyers in the market to be able to afford it, the supply will be higher than the “qualified” demand..i.e. not just ppl who want it, but ppl who want ti and are willing to pay what you want for that property.
if prices escalate that property is out of reach of most people, then what do you do with it, if you cant sell it at high prices..what price do you sell at.
rent it? how much will you get on rental to be able to to make it worth your while to have your capital tied up in a property.
speculative real estate investments are causing concerns in real estate circles in US, one would think that the same concepts apply globally.