Things have value because we give them value. The only value intrinsic to a house is that people want them. If we are looking to buy a property, we can have a reasonable expectation that in 10, 20 or 30 years, people will still want houses, property, and that your house will still fit the bill. However, there are a few factors which go in to property sales that may reflect more than a simple assessment of what people are willing to pay.

One factor which can affect the price of a house are the regulations governing who is allowed to purchase the house, and what aid or penalties their purchase will fall under. For example, the American real estate market is often invested in by foreign entities. Recognizing the stability of the market, those with capital from other areas of the world seek to make investments in US residential and commercial properties. While someone selling a property might rejoice that this extra competition will drive up the price, there are others who might have different opinions. For example, Chinese investors have traditionally had a large presence in U.S. housing markets, particularly luxury properties. However, the Chinese government has begun to restrict this, seeking to stem the flow of wealth out of their country.  Alternatively, some local governments have put restrictions on foreign buyers, often passing regulation requiring properties to be inhabited, or putting the properties at risk of being taxed heavily.

This can be good for the locals however. While it initially might seem good that foreign money could prop up the home value in your area, it can also decrease the quality of life for those who stay. Property taxes could rise as the home value does, while empty homes owned by foreign millionaires sit unused for much of the year. This can hurt a community, as not only do empty homes attract crime, but also mean that you will have fewer neighbors with whom to engage. Many studies have connected happiness and fulfillment to community engagement, so taking away the opportunity to socialize could seriously impact your quality of life.

While it is likely that the global economy will only become more connected, it is still important that we stay aware of the trends which will impact us. Understanding the interests involved in real estate investing can help you to better understand the value of your own property, and can hopefully help you to make the best financial choices for your situation.