What is the real estate bubble & its causes?

What is the real estate bubble and what are its causes?

The real estate bubble

It is a temporary, but large and illogical economic boom in real estate prices

Real Estate Bubble Reasons:

  • It occurs due to the steady increase in demand versus supply, which usually takes a long period for an increase in it, to return prices and drop very much during the stagnation period due to low demand and the inability of the majority of the population to buy, after which the bubble bursts Real estate
  • The real estate bubble occurs as a result of the so-called speculative process, speculators enter heavily into the market and increase spending to buy real estate to sell it later. The demand for real estate increases and its prices rise, leading to inflation and reaching the point of collapse.
  • One of the causes of the real estate bubble is also the lack of real estate and the long time in construction And selling, which leads to a slowdown in supply in order to respond to demand.
  • In addition to the decrease in the areas allocated for building construction.
  • The lack of regulation in the real estate finance market
  • Low interest rates on mortgages.