The Impact of More Affordable Houses to Property Investing Business

It is not a secret that in most areas, housing is unaffordable. It is hard for young people to afford a house especially when they are starting a family. Getting into property market will be much more challenging. Housing affordability has become issues these few years. From buyer’s point of view, more affordable housing benefits them because then they can afford a house to live in. however, it might be different from business point of view. If house affordability is balance with the profit they will gain then it is not a problem. However, affordable housing with no profit in return is a waste. \

Things that can impact housing affordability

To make housing more affordable, property value will need to drop considerably. It happens if people are forced to sell up their homes with the price that drops significantly because there is nobody want to buy them. For house to be more affordable for people from walks of life, it means the property values need to fall and it needs to fall significantly. It involves property cycle in the process. Of course, more affordable houses are desired by most people especially buyers. However, if the property value keeps dropping then it can lead to a property crash.

  • In property business, people who want property price to fall the most are most likely first-home buyers. The ones that want to get into property investment but have difficulties in saving a deposit are those who want the property values to drop the most. Those who get into property investment but having feel that they are priced out of the market are also likely want the price to drop significantly. However, they likely want the price to drop in short time and not permanently. They want it the most at least until they can afford to buy a property. Of course, they want the price to increase again precisely once they are in the market.
  • There are several ways to make property more affordable. First by increasing wages so that homebuyers have more money to buy property. Increasing grants and incentives also significantly help to make more affordable property. This may not be the most effective way to make property more affordable because this only work for few selects buyers in the short term. Another way to make property affordable is by decreasing the value of properties. However, it is also impossible for home owners to wish their property price to drop.
  • Basically, more affordable properties don’t really affect wealthy property owners but affect more ordinary working class citizens. When the property price drops or more affordable, they may lose their jobs and homes especially when a property crash occurs. It is possible for a property crash to happen overseas. If it happens, it may affect the banks because then there will be more troubles come to them. Thus, even though affordable housing sounds promising, it doesn’t always have positive impact to property investing business. The possibility of more affordable property in lively environment is even almost impossible.

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