What is Real Estate?

Property-related activities are highly diverse and involve besides property management also planning, financing and construction activities, valuation, facilities management as well as consultation or brokerage services. The real estate sector has a higher economic importance than other sectors such as the automotive industry or the healthcare sector.

Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this an item of real property, buildings or housing in general.

The construction of commercial houses, residential housing, and business spaces, such as hotels, restaurants, theaters, and industrial buildings, namely factories and government buildings, are all covered by the real estate sector.

Role of Real Estate Sector In Economy

Why Real Estate Sector Is Important?

Real estate is one of the most important sectors in the economy. The affordability of real estate and rental prices and changes in those prices have a direct impact on the wealth of property owners and tenants and their consumer spending.

Real estate provides better returns than the stock market without as much volatility. Real estate gives you more control of your investment because your property is a tangible asset that you can leverage to capitalize on numerous revenue streams, while enjoying capital appreciation.

Realestate Market Factors

Supply and demand

The law of supply and demand you learned in Economics 101 plays the most significant role in home value movements. Property values rise when a low supply of homes for sale meets strong buyer demand, as buyers compete in bidding wars to secure a home from the limited inventory.

Comparable sales

Real estate agents and appraisers alike value homes based on the sale price of comparable homes in the area, known as “comps.”

Jobs market

Strong job creation often leads to an increase in buyer demand as prospective home buyers gain financial strength and stability from new jobs to purchase.

Cost of borrowing

When mortgage rates are low, more buyers step into the market, seeking to save thousands to tens of thousands of dollars over the lifetime of their mortgage.

Categories of Real Estate


Land is the baseline for all types of real property.

Land typically refers to undeveloped property and vacant land.

They can increase the density and increase the value of the property.


Residential real estate consists of housing for individuals, families, or groups of people.

This is the most common type of estate and is the asset class that most people are familiar with.

Within residential, there are single-family homes, apartments, condominiums, townhouses, and other types of living arrangements.


Commercial property refers to land and buildings that are used by businesses to carry out their operations.

Commercial real estate include shopping malls, individual stores, office buildings, parking lots, medical centers, and hotels.