Who Benefits from the Real Estate Market?
Many parameters influence the value of a property as well as the profitability of a real estate transaction, the most important being the current inflation rate.
Furthermore, it is difficult to have a relevant and objective opinion on the subject knowing that experts in the field are all stakeholders in the system and their only objective will be to convince you to buy or sell to feed the process.
Let's remember that a good part of newspapers lives thanks to the windfall of organizations taking an active part in this trade.
What is Inflation?
"Inflation is the loss of purchasing power of money which results in a general and lasting increase in prices. To assess the inflation rate, the consumer price index (CPI) is used."
— Standard Economic Definition
Technically, an increase in inflation is naturally accompanied by a sharp rise in mortgage rates. It's a forward race where each parameter feeds the other.
Consequences on Real Estate
Over the past fifteen years, many countries have faced global inflation of 20% while property values have more than doubled. Inflation benefits speculators who play on the global axiom giving a certain advantage to real estate.
Regarding rentals, in periods of high inflation, the reference rent index is generally indexed to the consumer price index set by the state.
In conclusion: inflation always causes real estate prices to rise. For this reason, we advise you to use our acquisition simulator.