A fully functioning and well regulated real estate market can be an important factor to enhance the economy of all countries, both through upgrades in the housing stock and building capacities as well as the development of mortgage finance. The real estate sector also plays a fundamental role in the transition and consolidation of green economies, with the related generation of employment and growth. Finally, a solid real estate economy is necessary to guarantee mobility of the labour force and improve adjustment to migration flows worldwide. Building entrepreneurship and real estate investment decision making are closely associated with real estate market and economic development analysis.
To encourage economic development and contribute to social well-being, real estate markets should be efficient. This means that data and information on market trends should be accessible and based on clearly documented sources. These requirements are essential to make purchases and sales safer and attract investments, as markets that are not transparent and have little data and information available are usually riskier. Riskier real estate markets also determine higher costs in mortgages and loans. Credit policies directly influence real estate market dynamics in the sense that real estate assets form the collateral on which mortgages and loans are allocated. Nonaffordable mortgage rates prevent the purchase of real estate and have a direct influence on living standards. Competitive and affordable mortgage rates with easier repayment installments are increasingly an essential for both young couples and first-home family buyers, which would contribute to solving housing problems in the long run.
Some critical issues of the real estate sector should be understood, in order to better develop management tactics and strategies that might assist with the identification of solutions to the current economic crisis worldwide. Rules and principles should be established that might promote long-term solutions for sound real estate markets in different enforcement frameworks and in compliance with the respective legal systems, so that economic and social benefits are ensued. Norms and regulations, together with the systems set up by every country to control and legally protect the rights of possession and use of real estate, provide the necessary foundations on which to create and develop efficient and integrated markets.
Current global economic crisis has brought up a range of problems to real estate market, among which mass global migration plays an important role. The big questions "How will cities accommodate mass migration?", and "How can the real estate industry respond?", are yet to be answered.
The current movement of migrants into and across Europe has substantial impacts on both European cities and the real estate industry. The settlement of migrants in European cities, both on a temporary and a permanent basis, will change cities and people’s perceptions of cities, and affect land and real estate values. There is a pressing need for multi-sectoral responses to address the future needs of our changing urban populations – and, indeed, the opportunities for the real estate sector.
In spring 2016, a research project began on exploring the implications of mass migration for cities in Europe. The purpose of the research was to understand how cities can best accommodate migrants and how the real estate industry can respond effectively. Reserch findings suggest that migration is not perceived to have changed local housing markets in any significant way but is considered to have added to the problems of an already overstretched residential market. In many European cities, ongoing urbanisation processes have led to extreme pressure on affordable housing.
While migrants seeking to escape conflict, persecution, poverty, and environmental disaster have been crossing the Mediterranean by boat to seek sanctuary in Europe for a number of years, in 2015 the scale of arrivals increased beyond all expectations.
Italy and particularly Turkey and Greece have encountered the majority of arrivals – many of whom then continue to Germany, Sweden, and Austria to claim asylum. Meanwhile, states seek housing solutions for the longer term. Among the solutions being considered are the conversion of commercial, industrial, and agricultural buildings; dispersal of migrants into areas of low housing demand; or the construction of new dwellings. To date, little research has been undertaken to examine what kinds of housing solutions might be feasible. It is clear that in the short term, solutions must be fast, durable, flexible, and affordable, as well as politically palatable given the sensitivities regarding allocating scarce resources to new arrivals.
The real estate industry is ideally placed to embrace the challenges associated with the new housing demands and can play an important role in the future, alongside governments, in providing high-quality, affordable homes incorporating principles of good urban density. The recent flow of people into European cities has had a significant impact on the real estate sector, and it is likely to have far-reaching implications for the future availability of housing, infrastructure, and community cohesion. The migration crisis has brought challenges in terms of land use and housing across Europe. Inevitably, urban areas are under the most pressure.
Real estate sector can be a driving force for development in both emerging economies and industrialized countries due to its close interconnection with many other sectors of the economy. Good governance will contribute to making the real estate market more environmentally sustainable and more socially responsive to the need for adequate housing for all. It is necessary to develop policies for short-term actions to boost the real estate markets, which may stimulate more structural institutional reforms in the long term. This will minimize the recurrence of financial crises and their social impacts.