Master's student, Dorokhov Svyatoslav

Karaganda Economic University of Kazpotrebsoyus

The role of the real estate market in the regional economy

The real estate market - is a set of transactions made with real estate, the information they provide, operations management and financing activities in the field of real estate. The real estate market - is a subsystem of the common market, associated with the turnover of property rights [1].

 General concepts of the real estate market.

The main factors that operate in any market are: demand, supply and price. Demand - the number of land, buildings and rights to them that buyers are willing to buy a folding prices for a certain period of time. Ceteris paribus demand for real estate varies inversely related to the price.

Demand for real estate objects is influenced by numerous factors:

• economic factors: economic growth and technological progress; the level of competition in the market; level, dynamics and differentiation of income of potential buyers; the level of business activity of the population; the possibility of borrowing; the cost of construction and real estate prices; prices and tariffs for public utilities; rent levels; taxation.

• Social factors: the structure of the population; population density; the number of families; migration; population size and trends; age and social status of the population; level of education, and others.

• natural and climatic environment: climate; the duration of the seasons; water and heat treatment; soil type; supply of nutrients in the soil; ecology.

• administrative factors: permanent and temporary restrictions; condition of eligibility for the construction of real estate; legal conditions of the transactions (registration, deadlines, etc..).

• Environment: the state of social infrastructure; transport conditions; location of the property.

• national and cultural traditions of the population.

• Political factors: the degree of perfection of the legislation, the level of stability.

Demand for real estate can be very variable across regions, areas and districts. For example, the opening in the small town of new factory can cause significant inflow of labor, which, in turn, will require the construction of a large number of new housing, shopping and recreational facilities and so on. At the same time, the lack of funds for mortgage lending and high interest rates could dampen demand for real estate. Demand for land as a factor of production, in its essence is derived from the demand for the final product produced with the use of land. Therefore, the magnitude of the demand for land will be determined by: the price of land relative to the prices of other factors: production; land productivity; cost of the final product.

Offer - is the number of properties that owners are willing to sell at a certain price for a certain period of time. At any current time total supply consists of two elements - the offer existing and new properties. The ratio of the two components varies in time proposals and from place to place. At the same time, the main trend is the dominance of the existing real estate offers, due to its durability.

Change of real estate offers in the market can be realized: through the construction of new or renovation of existing homes; by changing the type of use; by changing the existing rights of property without physical property changes.

Price - is the amount of money paid per unit of real estate in the transaction. Market value - is the most likely cash equivalent property. This is the highest price that will plot for sale in a competitive and open market, where the buyer and seller are reasonable and do not affect foreign trade incentives.

Segmentation of the real estate market. In describing the structure of the real estate market uses three most common approaches: institutional; object; reproduction.

Institutional approach involves the description of activities in the property market from the point of view of legal rules, regulations and standards, typical methods for its implementation and management, ie. E. As an independent institution, as well as showing the relationship between the institutions. We distinguish the main institutions of the real estate market: governments (federal, regional, municipal) in charge of regulation of conditions of functioning and development of real estate market; institute an independent real estate appraisal; Development; banks and other institutions (investment funds, trust funds) are used in the activity mechanism of mortgage finance; Institute of property managers; Institute of Realtors; public and private notaries; construction companies; renters of real estate; sellers of real estate; self-regulatory and socio-professional associations real estate market, etc.

Object approach involves classifying the activities of the real estate market from the point of view of the object of civil relations (land, man-made structures, as well as the corresponding property rights). Legitimately be identified: the land market; Market artificial structures (residential, industrial and commercial real estate); construction market; timeshare market, etc.

Reproduction approach involves description of the structure of the market through the prism of relations arising in the process of reproduction cycle of real estate. With a sufficient degree of conditionality they can be represented by three groups of relations:

• development of real estate market - a set of relations that arise in the process of reconstruction or creation of the property. Suggests activities to create (modification) of the physical characteristics of properties (all further determine the nature of transactions with the rights (turnover) and use of the property);

• consumption market of real estate - a set of relations that arise during the operation, maintenance and management of the property. Ensures operation, maintenance and management of real estate.

• market turnover of real property rights - a set of relations arising from the redistribution of property rights. Provides transfer of property rights, registration rights and transactions.

The real estate market has a branched structure, and it can be segmented according to various criteria. By the method of transactions in the property market recovered following its components.

The primary market - an economic situation where the property as a commodity for the first time to enter the market. The main sellers of real estate in this case are the state on behalf of their federal, regional and local authorities (through privatization of state and municipal enterprises, residential properties and property rights) and construction companies - suppliers of residential and non-residential property. Number of real estate, offered in the primary market depends on new construction. Given that the housing needs of the population, entrepreneurs - in commercial real estate, far from being an adequate response to the further development of the real estate market can only take place with the new construction, ie. E. The primary market.

In the secondary market property serves as a commodity, previously used and belonging to a certain owner - the person or entity.

Primary and secondary real estate markets are interrelated. If for some reasons (for example, ethnic conflict in the region, unfavorable environmental conditions, and so on. D.) Increase the supply of real estate in the secondary market, it will lead to a depreciation of the real estate in the primary market. At the same time, the growth of construction costs leads to an increase in prices in the primary market, which immediately affects the growth of prices in the secondary market.

Organized market - a business turnover of real estate and rights to it in strict accordance with the legislation in force with a licensed professional intermediaries. This market ensures legal clarity transactions and protect the rights of their members. Unorganized (street), the market does not always provide the reliability of transactions.

By type of object (product): the land market, the market buildings, businesses, buildings, perennial plantations, property rights and other objects. By geographical factors: each region and district can be a separate market; even in different areas of a single city may be different market conditions (local, city, regional, national, global). At a cost: the market for expensive real estate, mass market relatively inexpensive real estate. According to the degree of readiness for operation: existing facilities, construction in progress, new construction. The form of ownership: state and municipal, private, etc. According to the type of transactions: sale, rental, investment, mortgage, pledge, and others. By the use of (functional purpose): the housing market, the market for non-residential buildings (commercial real estate) market real estate, industrial and agricultural purposes. [2]

Principles of management real estate market is largely dependent on political and economic conditions in the country, but at the same time they have to take into account prevailing international experience. Achieving the goals set out possible taking into account the following principles of management.

Separation procedures - use a special approach to the regulation of relations of different types of real estate - residential and non-residential buildings, land, forest land and other facilities. Openness of information on all participants and objects of the real estate market to make business decisions. Publicity rulemaking - public discussion of draft laws and other regulations. For example, the discussion of the program of housing reform, affecting the interests of all segments of the population. Competitiveness as a mechanism for improving the quality of services in the market and reducing their cost. The separation of powers between regulators - rulemaking and normoprimenenie - should not fit in one person. Properties of state and municipal property are in general joint ownership and use of the entire population of the region. The simplicity and clarity of the rules and procedures established by legislative acts of the property, the reliability of the protection of the owners - bona fide purchasers of any arbitrariness.

The use of additional protective measures in the market residential citizens at risk - minors, single pensioners, the disabled and others. Rational distribution of the real estate market management functions between government agencies and professional participants - private and public organizations (associations of realtors, appraisers and others.). Policy-based property management should ensure effective use of land in accordance with the approved schemes zoning and exclusive address and reasonable provision of tax benefits with a gradual transition from providing incentives for land payments to address compensation payments from the budget in line with its social policy.

Representative bodies of state authority (provincial, territorial and municipal) in the public interest shall adopt laws and other normative legal acts establishing the procedure for the possession, use and disposition of real estate assets. Disposal of state property in accordance with applicable law, the executive bodies of state power. Privatization of state and municipal property and compensatory transfer of rights to non-state facilities must be carried at market value and not on the inventory.

Fees and taxes levied on real estate, including for transactions with them, divided by levels of management in accordance with established standards. [3]

Operations with premises in private ownership. Purchase and sale of residential premises, the most common operation in the Russian real estate market. Features of transactions in dwellings, established the Civil Code are as follows:

- Availability of the list of persons stored in accordance with the law the right to use this residential premises after its purchase by the new owner;

- The introduction of the contract of sale of residential premises by virtue of (a contract is concluded) only from the date of its registration.

As a result of privatization became widespread barter living quarters.

Under the contract, each party undertakes to transfer to the other side of one dwelling in exchange for another. By the rules of a barter agreement of purchase and sale of residential premises which does not contradict the essence of barter. So, do not apply to the contract rules governing the cash settlement of the contract of sale, as contrary to the essencee of barter as cash payments changing, except in the case of barter unequal living quarters are not made.

The lease agreement is considered an agreement whereby the lessor provides the lessee and members of his family living space without limiting the size of the contractual payment for temporary possession and use, and the lessee is obliged to use it in accordance with the contract and make timely rent, including charges for public utility services.

Owner of the dwelling can give it to any person or entity by issuing this real estate deal donation contract. Under the contract, one party donates other side living room.

Under the contract rent one party (the recipient of rent) transfers to another party (the payer of rent), the ownership of the property and the rent payer agrees in exchange for the property periodically to pay rent to the recipient in the form of a sum of money or the provision of funds to maintain it in a different form. The deadline for payment of rent can be installed under the contract: unlimited (permanent rent); the lifetime of the recipient of rent (life annuity). [4]

By the method of the same transactions the real estate market can be divided into primary and secondary.

Primary and secondary real estate markets are interrelated. Under the primary real estate market is commonly understood as a set of transactions made with the newly created object, ie. E. This apartments in new buildings and buildings under construction, as well as privatized entities that previously did not pass state registration. It provides real estate transfer in the economic cycle. Under the secondary real estate market - transactions made with the already created objects in operation and related resale or other forms of transfer of objects placed on the market from one owner to another.

Primary and secondary markets, speaking two parts of a single real estate market, mutually influence each other. For example, the price of the secondary market are a special landmark that shows how profitable is the new construction at the existing level of costs. [5]

Mutual influence of supply and demand in the primary and secondary real estate market is a factor substantially complicates the analysis of the circulation and the selection of the correct decisions about investing in real estate. Particularly difficult this task is another reason that the transactions in the property market are, as you know, private, and often confidential, which seriously impedes the collection of necessary information.

However, despite the complexity of the task, it is not the main. The real estate market is affected by the economic situation in general, both at the national and regional levels. Ability to respond to change this situation, the primary and secondary real estate markets are different. So, with a decrease in demand secondary real estate market may be flexible enough to respond to a decrease in supply and falling prices, the lower limit of which is determined essentially by three factors: the purchase price of the object, the financial position of the Seller and matched his income level of current expenditures on the property. The range of price reduction or suggestions can be quite broad.

In the primary real estate market situation is different. The lower limit of the price determined by the level of construction costs: when the developer is going straight losses. However, as is more difficult to reduce or increase the bid. In the construction process involved a number of organizations, each of which is interested in the use of their capacities and resources (which is especially true for contractors), and stop the building process instantly impossible. Equally impossible to quickly increase the supply - the process of creating real estate takes months and even years.

At the price level of primary and secondary market is influenced by two variables:

- factor conditions of doing business in the city;

- factor of the standard of living;

- The policy of the city authorities in the field of real estate and new construction;

- The level of effective demand of the population of the regions;

- The cost of construction;

- The availability of credit and housing subsidies;

- Macroeconomic factors (oil prices, the rate of $ shares, deposits, etc. Etc.).

Literature:

1. Novikov BD Market and valuations in Russia. - M .: "Exam", 2000. - 512s

2. J. Friedman., Nick Ordway. Analysis and evaluation of income-generating real estate. Trans. from English. - M .: Case, 1997. - 480 p. - ISBN 5-7749-0045-2

3. Tepman LN Real Estate Appraisal: A manual for schools - M .: UNITY-DANA, 2004.

4. Lake ES Economics and management of real estate. St. Petersburg: Publishing "ISS", 2003.

5. Hamidulova SN market and assessment of residential property. Part 2. Toolkit. School of politics and business.