Automobiles & Components |
Written by Rafael Tayler |
Thursday, 13 October 2011 03:12 |
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In five years the value of properties for sae in Uruguay almost doubled, while properties for rent also faced major increases, two facts attracting more investors looking to buy properties and engage with local property management firms to get profits from renting them.
Even some might think about a "Price bubble" in properties for sale, recent studies seeking to shed light on the rationale behind the rise of property prices, based on figures from National Statistics Institute (INE), found Uruguay doesn't seem to be far away from such effect.
 Since 2006, the price per square meter in the capital of Uruguay rose 90.6% in dollar terms, but in the same period the cost of food, education and even electricity increased in equal proportion in the same currency.
A property price bubble occurs in a context in which the evolution of the value of an asset deviates from its foundations. Prices rise, and yet the genuine demand for the good remains constant or even backwards. The speculative desire becomes the engine of a price increase to get rid condemned by the very nature of the phenomenon.
If generalized trust in rising prices, which encourages the increase, a slight change in market conditions, barely a breeze at the right time, can turn and click 'expectations of a bubble at any moment. |
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