It is no surprise that house prices are constantly rising. Naturally, prices of all products rise as time goes on. However, it seems to be the housing industry that has taken a huge hit. There are more younger people than ever before struggling to buy a home. They are unable to afford the upfront costs and then maintain them. So what makes things so expensive? Well, a well-built house goes through plenty of regulations. From property development funding through to building – many new homes are built beautifully. This naturally adds to the cost. But it isn’t just the new builds that are expensive. Economically, demand for housing is influenced by future house price expectations: income growth, demographics, economic liberalization, and more. An increase in home prices affects economic growth and may indicate a surplus of demand or the strengthening of the housing market. Moreover, house prices are rising as well as rising land prices, which may affect investment decisions and economic production. When the demand is higher, so is the price. Whilst many people rent homes, there is still a desire for people in their late thirties or those with families, to want the security of buying.
Why are there so many costs?
A potential impact on costs in the housing market is the number of people in the family. This includes those with families having to decide whether to invest in a home or invest in children. If a household wants an expensive house with beautiful aesthetics, there is a longer wait to complete the work and pay for it. If they don’t have children, however, this makes this less complex. There is no need to rush to get a home. A family with a large number of people would prefer a cheaper home. Although, a home that provides stability, safety and access to services that are a critical part of starting a family.
There is a plethora of costs attached to buying a house. Surveying fees, insurance, bank fees and more. It can get incredibly pricey, and this is before the down payment. Often, it is 10% that is required when you want to purchase a home. This isn’t always possible for many people. Even those working solid 9-5 jobs. The cost of living is constantly rising, therefore the house prices are too. This means that unless wages significantly rise too, many more people are having to consider other options. This may include sharing a home, living with family until they have the money or renting a cheap apartment. House prices are also dictated by the location. If you are not concerned about the location that you live in, you may be able to find good property at a good price. If you want to live in a location where you have schools and amenities nearby, you may have to compromise on other things. Such as the size, the decor and more. The price is likely to skyrocket if you want to live in a very desirable area.