Understanding the Property Market by Jonathan Waller

Residential or commercial are the two different groups in the property market. Commercial properties are factories, warehouses, offices and retail outlets. Each of these groups are affected by different factors that drive the value up or down. Individual owners usually have control over residential property. Almost 80 percent of all residential homes are occupied by their owners and the other 20 percent are used to rent out to others.

Just like everything else in the economy, supply and demand determine the value of homes on the market. When there are not enough homes being built the supply is low. This increases the demand and people want homes to buy. When there are none available the owners are able to raise their prices because people are now willing to pay more money for a property. When there are too many homes on the market people are not forced to pay prices they do not like. They can easily find another home for a lot cheaper or with better features for the same price.

Commercial property tends to follow the residential patterns to the most part. As low as 10 percent of all commercial property is privately owned. The rest of commercial properties are owned by multiple people such as investors who are investing in real estate and the stock market. Whenever our economy tends to do better people are willing to spend more money, this increases the price of properties. Usually when people buy property from other countries around the world they are trying to make money from renting it out. They goal is to rent out the home until they pay off the mortgage than once they is done they resell the home for profit.