When I bought my place more or less 15 years ago I never considered how much it's value would increase, but in fact is now valued in the double of what I paid for it 15 years ago, so it was a great investment. What do you think makes some places increase their value so much?
I think easy credit is the main reason prices have gone up. There is no shortage of housing unless you are in a populated area with no other place to build. As long as there are jobs that cause outsiders to move in, the prices will go up. They need to live in that spot for work...
Location is a huge factor. Supply and demand. Local economy / markets and other local factors. National and regional economies and markets somewhat as well.
I think it's pretty much the location factor, my house is small, no big deal, but it's worth 2-3 times more than a bigger house in another location, so location is pretty much everything.
I agree, it is all about location. People want convienence in their lives, so if you live near a shopping center or in town, your house will automatically be worth more than a house in the sticks. Large kitchens and master bedrooms are also a huge factor too.
@Gelsemium: It's a mixture of various factors that increases the prices of real estate. Here are a few of the main factors: 1) Population growth. Land and houses are limited resources while the population is constantly expanding. The causes demand for houses to increase faster than the supply of houses can be built. Furthermore, the land your house was built on gets more valuable by the second as developers are forced to build further away from the city due to scarcity of land. 2) Development. The city is constantly expanding and new houses and businesses are always being built. Cities nowadays consists of various 'cells' with their own livelihood and demographic. As the area around your cell undergoes more development such as new shopping malls and shop lots, it'll attract people looking for jobs who also coincidentally need a place nearby their workplace to stay in. 3) Inflation. Currency is constantly losing its value as the government keeps printing more each year and prices of basic necessities go up. This is the reason why you might be able to buy a full meal at 1$ in the good old days but now you have to pay 10$ for it. Luckily for you, like gold, prices of real estate are adjusted for inflation which means their value will increase in tandem with inflation unlike stocks or bonds. However, I don't think inflation can really be counted as 'profit'.
That pretty sums everything up, had not looked at it from that angle but that is the harsh truth, i wonder how it 'll be 10yrs from now!?
Yeah, I agree that population growth, development and inflation take a big part in it, but I still think that location is the main issue, there are simply some places that worth gold.
In itself, the value of money increases over time and that strongly influences the increase in property rates as well. If you would compare the value of the money that you invested 15 years ago, that will also have the same value as the increased amount at this time. In fact, buying a property is just so much like saving money, the only difference is that the amount follows the value of the money.
I don't know about that wander, so if I bought a house let's say for 75.000€ 15 years ago and now it's worth double, the house value has increased way more than if I just had 75.000€ in the bank right?
