How Does Inflation Affect Real Estate Market?

[Good-Guy]

Inflation is a really horrible problem for any kind of country in the world. Whenever the fire of inflation spreads in a country, the economy collapses and the country may even go bankrupt in the end. According to me, inflation is just like inflammation for the economy or financial conditions of any country. Just like inflammation damages the body, inflation tends to wreck the sovereignty and economical system of the country. Many people claim that real estate market would protect you against inflation because whenever the inflation hits any country, the real estate properties tend to go up in the value.

However, I believe that inflation can also have a bad effect on the real estate market. This is because whenever the inflation rises in any country, the buyer of real estate properties become scarce in the market due to a lack of purchasing power. This is logical explanation because inflation reduces the purchasing power of capitalists and many investors also move away from the country. For example, Venezuela is having a big problem of inflation, unfortunately. Why would anyone buy a property there when it could not be sold when you want due to a lack of buyers in the country?

 

[Jasz]

Inflation is one of the biggest factors that affect a real estate market. It's not just the rising costs of goods and services but also reducing purchasing power over time. The real estate market is affected by inflation.

When inflation increases, you can expect a larger range of prices. As an example, homes in the $200,000 price range may sell for $210,000 and homes in the $250,000 price range may sell for $300,000. This may sound like good news to some home buyers because they are more likely to pay more for their home during periods of inflation. However, these same benefits that increase your buying power mean that sellers may be asking for more than what they would have asked for during a period of deflation when prices across the board were declining.


There is a tendency that if the rising inflation rate will affect employment rate and vacancy rates would have a greater impact on housing sales
People will hardly purchase or pay a reasonable rent for an apartment.

The disadvantages of inflation is greater than it advantages no matter the kind of business or investment. One must be conscious of when and where to make business investments, countries that have high rate of investment occurrence are not the best location to invest.

 

[Alexandoy]

When there is extreme inflation the entire economy is affected. The prices of goods and services are sky high and buyers would be struggling. In times of the great inflation in 1986 most of the people I know persevered with what they have. Even with food, everyone was frugal because the wages are the same but the prices of goods are exorbitant. The most affected, I think, is real estate. How can you buy a lot that costs 100,000 that the inflation had made it 120,000? That is simply a waste of money because we knew that sooner or later the prices will get back to the normal level. True enough after 2 years our Peso became stable with the US dollar. Most of the prices got down from the sky level and the economy started to roll again. When there is inflation the spending was highly controlled.

 

[Sotherefore]

Inflation is always as a result of bad economy of a particular country and it will have an effect in almost 95% of everything that deals with that country , It would have a serious offect in a particular property you are investing on, what I understand about inflation in property is that it will make the price of a particular property to be higher and this may be profitable to the seller but at the same time the seller may still find it very difficult to make use of the high price of selling a particular property because he or she will still spend it on buying things also at a higher price,

Inflation is not even the best for any particular country that is why every country should always try as much as possible to have what to offer in the competitive world , if not a lot of countries will be left behind and they won't even have anything to offer..

When countries experienced inflation the country is always in problems because things will be very much difficult and people won't even be able to afford some things to buy , there will always be a high rate of unemployment and so many things because of difficulties.