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What are the biggest factors that have led to the continuous rise of real estate prices in major cities around the world?

Camden Nowell

The continuous rise of real estate prices in major cities around the world can be attributed to multiple factors.

Firstly, urbanization is one of the biggest factors contributing to this trend. As cities continue to grow and become more densely populated, the demand for housing and commercial properties also increases. Many people flock to bustling cities in search of job opportunities and a better quality of life, thereby driving up the demand for real estate.

Another major factor is globalization. As the world becomes increasingly interconnected, cities are becoming more important hubs for business and commerce. This means that more and more companies are setting up shop in major cities, leading to an increased demand for office space and commercial real estate.

In addition, low interest rates have also played a major role in driving up real estate prices. As interest rates have dropped over the past decade, it has become easier for people to take out mortgages and invest in real estate. This has fueled a surge in demand for properties, which has in turn driven up prices.

A lack of new housing construction is also a major contributing factor to the rise in real estate prices. With population growth and urbanization, the demand for housing has increased dramatically, but in many cities, new housing construction has not kept up with the pace of growth. This has created a scarcity of available housing, driving up the prices of existing properties.

Lastly, speculation has played a major role in the real estate market. Many investors see real estate as a safe and reliable investment, leading to an influx of investment capital into the market. This can lead to a phenomenon known as "speculative bubbles", where prices are driven up artificially due to high levels of investment activity.

In conclusion, the continuous rise of real estate prices in major cities around the world can be attributed to a combination of factors. Urbanization, globalization, low interest rates, lack of new housing construction, and speculation are all major drivers of the trend. It will be interesting to see how the real estate market evolves in the coming years in response to these factors.