Real Estate
The term ‘real estate’ refers to areas of land and their fixed or otherwise immoveable improvements, such as buildings, fences, wells and other site improvements. Real estate refers to actual, or ‘real’ property; a legal term deriving from the Latin for ‘actual’. Real estate, or real property, is best defined in opposition to personal property such as clothing. Real estate is a traditionally lucrative industry, and covers the acquisition, development and selling of land.
With the development of private property, real estate has become a major business sector, and until recently was one of the major industries driving development projects and speculative land development. The ‘urbanisation’ of California, for example, was driven by speculative land development by real estate agents in the hope of buying land cheaply and paying for the development, making profits from the sales of these newly developed properties.
In the past year the economic recession has made it harder and harder for people to secure mortgage loans, and so the buying power of the public for new properties has fallen. With nobody able to secure the loans necessary to buy these housing developments, many real estate companies have found themselves the owners of empty and unmarketable housing developments. As a result, the real estate industry has found itself struggling to keep afloat, with only the fact that people need to live somewhere, and a few secure financial institutions providing mortgage loans, keeping the industry alive.
As the economy recovers and banks find the security to once again guarantee more and more mortgage loans, real estate will once again rise to become an important financial industry.