External Factors and the Real Estate

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Assignment 1.3 External Factors and the Real Estate Industry By Karen Chapman 11 November 2012 Assignment 1.3 Index: 1. The demographic environment: 1.1 Cultural diversity trends and developments Page 3 1.2 Demographics of own area, vs. national demographics and trends Page 3 2. The economic environment: 2.1 The current economic environment Page 3 2.2 Socio-economic factors Page 4 3. The political environment Page 4 4. The technological environment Page 5 5. The competitive environment Page 5 6. The legal environment: 6.1 Regulations pertaining to property ownership Page 5 6.2 Regulations pertaining to land use…show more content…
2.2 With the global economic meltdown, retrenchments and unemployment have become more and more of a reality in South Africa. With the increased unemployment levels, bondholders have become more hard-pressed to make payments and this has led to an increase in defaults and consequently repossessions. Other homeowners have tried to sell their properties as they have become more financially strapped. This has resulted in an over supply of properties on the market (a buyers market) and as a result some buyers are able to negotiate more favourable/lower prices on houses. Many buyers are also reluctant to buy because of economic uncertainty.(job loss/retrenchment). Banks stringent lending criteria have also prevented potential buyers from obtaining loans. The net result being that the property market has been severely negatively impacted. 3. The political environment: The change in the political environment in South Africa has also resulted in a change in the real estate industry. Agents had to previously deal with clients from one race group e.g. but with the repealing of the Groups Areas Act we now deal with clients we previously never dealt with i.e. different race groups, ethnicities and nationalities In 20 years, South Africa has achieved many successes, including greater political stability and greater economic freedom. Research Worldwide.com has just published results of its annual survey, which showed that property investments in
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