By: R. Safdar
The comfort of the people increases when they shelter in their owned house. Sometimes it seems like a success for which they struggle a lot throughout their life. The reason for this struggle is the expansion of the family and to meet the standard of life. Though it is the most expensive investment, always remain an asset for the family. The housing industry is playing a vital role in the generation of employment, revenue and circulation of business.
Housing prices are affected by certain economic factors such as household income, savings, daily living expense, interest rates and borrowing power. Based on these factors, housing price changes time to time. Usually, this price changing is more prominent in the industrial areas due to financial liberalization. Sometimes the site build houses become more expensive as compared with the manufactured houses due to high interest rates. Some cases showed that during the years 1998-2000, the housing affordability was highly increased due to low interest rates. On the other between years 1997-1998, the housing affordability decreased due to the high interest rate. Housing price should be increased in a sustained manner with time rather than sudden rise. The sudden rise in housing price may lead to a collapse in the housing sector. The housing affordability depends on the economy of that region. In comparison, the Selangor is economically stronger than Kelantan and therefore, in that region house affordability rate is higher. Therefore, the house ownership rate is higher in Selangor as compared with Kelantan.
Similarly, increase or decrease in the price of a house depends on the economy. During a rapid economic betterment, the house prices increase. In that case the house owners have a chance to sell their houses at a higher price even that the house was purchased at a lower price. On the other hand as the economy fells down these prices fell down and selling a house may give a financial loss.
For the consumers it is necessary to estimate their budgets and savings whether that will be enough to pay long term installments and other necessary payments of the house. After proper planning motivation is required to unite all the family members and decide based on all the facts and figures. Now a day it has become easy to buy a house as compared with previous years because of leasing or payment by installments. Real Estate Agents have considered the ups and downs of the overall economy and set the promotional prices accordingly. This sustained housing price can attract many customers which could also be a benefit for real estate agents who have spent huge investment in the housing business. There should always be a balance between housing price and affordability.