Why are real estate prices always rising?

Why are real estate prices always rising?

Why are real estate prices always rising?

It has been known for a long time that one of the best assets to multiply your wealth is real estate.There is also a deep belief that in the long term, you cannot lose your money on such an investment. Let us consider why this is so.

Reason number one – inflation

Real estate prices always follow inflation. The higher inflation and the fall in value of money, the higher the price of real estate. This, in turn, is desirable for a country’s economic growth in the world.

Some central banks, and in fact most of them, use an inflation targeting strategy. This means that banks make sure that prices are increasing year by year in the entire economy. Even if some central banks do not pursue their inflation target directly, inflation usually occurs and increases from year to year.

Real estate prices are rising even faster than inflation. There are several important factors for this:

  • People want to escape inflation– If someone has any savings, it is very unwise to keep them in cash. From year to year, money loses its value. Our fortune is shrinking!  Therefore, it is wise to buy an asset or few that follow inflation while not aging quickly. The first thought that comes to a thinking person is to put their money in real estate or gold. 
  • Changes taking place in countries and cities- Surely each of you in your life encountered a situation when visiting a place reached back into memory and when you saw it recently, it was not as developed as it is today. Along with the development of the region, neighborhood, district and city – real estate prices are also rising there. When you buy a plot of land or a flat in such a place in ten years, it may turn out that it is worth several times as much. That is why it is worth looking at real estate in the future.
  • Limited supply- some goods in the world can be produced infinitely. Real estate, unfortunately, not. We are not able to produce more land, which is obvious. This means that if the interest of buyers in a given area grows and the supply is limited, the price of these properties increases. 
  • Growth of people in the world – Just look at the data to see how the world population is changing – it is practically constantly growing, people have to live somewhere, so the demand for real estate will grow. Of course, this is about the whole world, because not all countries are like that.

No one knows what the future will bring, but history shows us that investing in real estate is safe and can bring satisfactory returns on investment in some countries. 

 Do you have any savings set aside that you do not need to develop your business or have no idea what to do with them? Invest in real estate that will generate profit for you, if you are in need, you can always sell a flat, house or plot of land! 


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