The Importance Of Real Estate To The Economy

The Importance Of Real Estate To The Economy

Real estate is one of the most important sectors in the economy; a sector which  plays a massive role in economic activity in any country. Zambia is no exception! The affordability of real estate and rental prices and changes in those prices have a direct impact on the wealth of property owners and tenants and their consumer spending. In this article we will dive deeper into ‘The Importance Of Real Estate To The Economy’.

What Is Real Estate?

In the context of this article we will define Real Estate as any property-related activities including; property management, property planning, property financing, construction activities, valuations, facilities management as well as consultation or brokerage services.

Role Of The Real Estate Sector In The Economy

  1. Firstly real estate is an enabler and facilitator of economic activity of various scales and levels. By offering the space for businesses to operate, real estate effectively provides the business infrastructure without which an economy could not operate.
  2. Secondly, real estate is a source of employment in all sorts of areas; not only for architects, builders and engineers, but also for legal and financial advisers, surveyors, facilities managers and all those that provide for the construction industry.
  3. Thirdly, real estate plays a vital role in the provision of infrastructure, which creates the conditions for property development. Schools, and hospitals are examples of projects whose viability can be highly dependent on associated real estate development.
  4. Finally, real estate represents an attractive asset class for institutional investors such as pension funds, insurance companies and sovereign wealth funds.

Conclusion

Property prices and rental prices are a critical factor in consumer spending and play an important role for price developments.

  • Residential real estate: provides housing for families. It’s often the greatest source of wealth and savings for many families.
  • Commercial real estate: which includes apartment buildings, create jobs and spaces for retail, offices and manufacturing.
  • Real estate business and investment: provide a source of revenue for millions.

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