It has been noticed in the last two decades that real estate is one of the safest and profitable investment, whether you purchase a commercial plot or residence plot. As for commercial property, usually, it is sold quickly because many different businesses want to set multiple headquarters. Whereas Residence plot is sold in its original state when it is divided into either 5 marla plot or 10 marla plot, or you can sell it after building new homes over it. Till now, there is no doubt that this has been really profitable, and many investors have benefited from building luxury homes in huge societies, just like Canal City.
Increase in Interest Rates
Well, this bubble of money is predicted to burst real soon. Obviously, this might give you a real shock, as many investors were dreaming about building their empires over this business. So, first of all, the primary reason behind this is that government keeps on increasing the interest rates of the property values, and when there is a rise in these rates then obviously the profit for investors will keep on decreasing. Right now, these rates are manageable, but it seems that they will suddenly increase anytime in the future, and that would be a huge downfall for the Real Estate market.
A decrease in the Number of Buyers
Furthermore, this real estate market is just like a circle, and that circle starts from the buyers, because as soon as there are a greater number of buyers, then this market will keep on making profits. Well, as the property prices are going up along with the interest rates, then for sure it gets hard for the buyers to purchase new lands. So, when there are no buyers, then there will be no circulation of properties, and there will be no profits. As, a result, it will be a simple downfall of this profiting market, and every investor has to face the consequences of this downfall as well. After this, last but very important reason is the trend that is going on in the real estate world which has caused to create many fools in the market.
Top Trend Followers
The simple example is the herd mentality, or in easy language following the top trends. So, if someone purchases a property to start a huge project on it just like Canal City then, its prices will soon go higher. So, with this mentality, investors start purchasing different properties even if they are sold at really high rates for the development purpose, and with the aim of making a profit out of it. Well, no doubt they even succeed sometimes, but if there is a risk to any business, then downfall comes as well. So, a time comes when the project goes a total waste, and investors do not make enough money, as much as they have spent on the land. Well, this is the time when the bubble of Real Estate has busted, and now everything has gone to total waste. So, these were the few changes that will completely change the Real estate market in the near future.
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