Functions of the real estate market

The operation of the real estate market as an element of market structure is characterized by features that are clearly disclosed by its function. Performing a number of general and special functions, the housing market significantly affects all aspects of life and human activity. The primary are those of its functions: 1. Information. The real estate market provides stakeholders information about the current state of the market (supply and demand, pricing). At the same time in a transition economy is an issue of objectivity, timeliness and completeness of such information, due to delayed development of information infrastructure markets, real estate (specialized media, information-analytical agencies, etc.). 2. The pricing. In the transformation of the economy form the real estate market due to the presence of significant price distortions, whose existence is due to the mismatch volume structure of supply and demand. As the market price distortions begin to level off and the conditions for the "on" the mechanisms of free pricing of real estate. 3. Intermediary. The real estate market are professional intermediaries - realtors, appraisers, insurers, mortgage lenders and others in transition economies have a situation where the quality and quantity of professional intermediaries do not fully meet the needs of the market, which increases the transaction costs of its participants. 4. Regulatory. The real estate market is actively involved in the redistribution of resources, directing the efforts of its members to comply with an effective structure of the economy and meet the public interest. In the full regulatory function begins to appear on the secondary market. 5. Investment. The real estate market is an attractive way to preserve and increase capital, contributes to the transfer of savings and savings of the population of the passive form of stocks in real capital, revenue-generating property owner. At the same time it serves as a kind of real estate insurance guarantee of investment risk. In the early stages of the real estate market in a transition economy investment is directed primarily to the acquisition of real estate consumer nature. As the meet this need, the investment flows are beginning to be directed into the sphere of commercial and industrial real estate. Expenses incurred by buyers and sellers of real estate in the contract. 6. Social function is manifested in the growth of the labor activity of the total population, increasing the intensity of the labor of citizens who plan to become owners of apartments, land and other capital and prestigious projects. Function in society contributes to the formation of the middle class, which is the basis of stability. One of the manifestations of the social function of the real estate market appears socialization of capital. 7. Stimulating the essence of which - the economic profits encourage the productive use of scientific and technological progress in the development and use of immovable property. Competition promotes high business activity and the search for new possibilities of effective management of capital property. In the initial stages of real estate property has a dual role: a means of accumulation of savings and income and promote the legalization of illegally earned money. As a result, real estate agents spend quite a passive policy. Positive developments in this direction appear with increasing competition and decreasing profitability of passive operations, stimulate productive investment. 8. Sanifying. The real estate market makes it possible to eliminate non-competitive and weaknesses of market participants, contributes to the bankruptcy of inefficient businesses. The market mechanism as the direction of search, but makes no warranties as to the final financial results. Recognize only socially necessary investments in real estate, it is only them and paid by the buyer. Variety of functions of real estate market reflects the specific products that are available to handle it. In the hall-a real estate market can be represented as a system of economic and legal relations that arise through the interaction of commodity and money circulation. It is therefore very important issue is the definition of the subjective structure of these relations. Category: Klasifikatsiya real estate | Tags: Features of the market