Recent policy changes have had a significant impact on the real estate market, influencing everything from housing affordability to investment strategies. Experts from various fields, including economics, urban planning, and real estate development, have weighed in on these shifts, providing a comprehensive view of the current landscape. One of the most notable changes has been the increase in interest rates. Central banks, particularly the Federal Reserve in the United States, have raised rates in an effort to combat inflation. This move has had a direct impact on mortgage rates, making borrowing more expensive for homebuyers. Lawrence Yun, Chief Economist at the National Association of Realtors, explains, higher mortgage rates are cooling down the housing market, reducing the number of potential buyers and putting downward pressure on home prices. However, this also means that current homeowners with fixed-rate mortgages are less likely to sell, leading to a tighter supply.
In addition to interest rates, changes in tax policy are also influencing real estate decisions. The recent amendments to the tax code have altered the landscape for both individual homeowners and investors. For instance, the cap on state and local tax deductions has particularly affected high-tax states like California and New York. Jonathan Miller, a real estate thong tin du an bds appraiser and consultant, notes, the cap on deductions has made high-end properties in these states less attractive, leading to a softening in luxury markets. This could push more investment towards states with lower taxes. Another critical policy change has been the introduction of more stringent regulations on foreign investment in real estate. Governments are increasingly scrutinizing foreign purchases, particularly in major cities where such investments have been driving up property prices. According to Carrie Law, CEO of Juwai IQI, a real estate technology group, Countries like Canada and Australia have introduced taxes specifically targeting foreign buyers. These measures aim to curb speculation and make housing more affordable for local residents, but they also reduce the influx of foreign capital into the market.
Urban planning policies are also evolving, with a growing emphasis on sustainable development and affordable housing. In many cities, there are new incentives for developers to include affordable units in their projects or to build entirely new affordable housing complexes. This shift is partly in response to the housing affordability crisis that has been exacerbated by the pandemic. Dr. Karen Chapple, an urban planning professor, highlights, Inclusionary zoning and density bonuses are becoming more common as cities strive to create mixed-income neighborhoods and reduce the socio-economic divide. The commercial real estate sector is not immune to these policy changes either. The rise of remote work has prompted a reevaluation of office space needs, leading to an increased demand for flexible workspaces. Additionally, zoning changes that support the conversion of commercial properties into residential ones are gaining traction.