The real estate market is going through hard times these days. This is a natural consequence of the fact that people can’t get loans and mortgages as simple as they used to no longer than two years ago,
It all started in North America, where the real estate sengment was giving collapse signs since more than one year ago. People went in debt and could not pay it anymore.
Europe followed quickly, with countries like the Baltic, Romania, Hungary, Spain or France following the trend and seeing their real estate prices going way down.
Maybe the most affected were the investors, who thought that buying and developing real estate assets would be the future and would bring them a lot of ROI. Based on the previous years evolution, the assumption was right. Not anymore.
Without mortgages, people don’t have money to buy expensive things like homes or even cars, especially when they are at a younger age and didn’t have the chance to accumulate any savings.
But for those who took money from the banks so simple, here comes the time to pay it back and some of them simply can’t. So they don’t pay and everything gets blocked, because the bank needed that money.
Where people can’t borrow money, real estate agencies can’t sell homes. This is how it comes that they need to struggle and to fight for their clients if they want to survive these hard times of crisis.
Governments help banks. For instance, in Romania, there is a program which is going to start very soon, in which the state grants 6000 Eur for people who want to buy their first home, but are not accepted by banks without collateral guarantees.