Residential buildings and the entire real estate sector is blossoming globally. It is a sector that is gaining so much attention from different class of investors. However, residential buildings are being characterized by unpredictable trends year in year out. For instance, the demand and supply of residential houses has for long been inelastic in the United Kingdom. Prices in most countries of Europe and the USA are not purely determined by the forces of demand and supply but a range of interrelated factors.

According to a survey by PWC in Europe, it is clear that the market of residential buildings is influenced by several factors which include; availability of a suitable assets, interest rates, cost of construction, national economic growth rate, international growth rate, political climate, availability and ease to access finance, government interventions, and inflation global economic trends among others.

In the USA, real estate sector has been on steady rate of growth which has been characterized by a potentially low rate of interest and increased demand for avenue residence. In both the USA and most countries of Europe, the government has created a stable environment for advancement of loans and mortgages. They have in addition ventured into the sector to construct residential houses and rent them at an affordable price with a view to eradicate improper housing structures and improve the living conditions of their citizens.

Therefore, the market of residential buildings in both the USA and Europe will be varying as a result of the existing conditions within not only the specific country but the entire economic block. This is due to the role played by factors which include;

Interest rate. In the USA and Europe, economic policies like those touching on interest rate are determined by the same regulatory body and applied by all member countries or states. Therefore, if a high-interest rate is set by this body and applied generally, it will reduce the amount borrowed from financial institutions to cater for residential houses which will then affect the market of these houses.

Rate of investment. However much the governments in these regions may try to regulate the real estate sector, the sector will be flooded if investments by both residential and non-residential cannot be controlled.  Non-residents from developing countries tend to migrate into Europe and the USA due to the potential within the already grown economies. There coming will overflow the sector which has resulted to a lot of inelasticity in the industry.

Cost of construction. Whichever trends the market may display; real estate market will be highly affected by the cost of constructing buildings. Availability and cost of land and other inputs like cost of raw materials and labor will influence the prevailing market rates. This is because the overall cost of constructing a building will be distributed to the tenants in form of rent.  Visit www.avenue-south-residence.com.sg for buying a condo or showflat and for any detailed information about this.