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The Real Estate Industry and the Crisis: a Global Service Systemic Response from Property and Urban Asset Management

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  • Giovanna Morelli

Abstract

The recent global financial crisis is having an extraordinary impact on real economy: a slowdown in growth, consumption and industrial activity trends, as well as an unsustainable increase in the rate of unemployment. The crisis blew up with the collapse of the US subprime mortgage market, largely due to the weaknesses of the global financial system and of its mechanism of guarantees and ratings. To face the crisis most governments have introduced exceptional measures, such as the Financial Stability Plan or the Public-Private Investment Programme in US, and implemented different policy in other industrialised countries. Thatnotwithstanding, banks' balance sheets are still affected by toxic financial activities: the adopted measures are probably not enough to fight the crisis. A more general reconsideration of the complete Global Economic Order must be established. The real estate market trends offer suggestions to overcome the crisis for two main reasons. At first, the performance of the real estate industy and of the housing market has turned into an important economic index every government should consider in developing solutions against the recession. In addition, this crucial sector of the economy can now to be considered a strategic industry, since it offers important growth opportunities for rural and urban areas, thereby promoting development, higher quality of life and sustainable positive performace for many crucial activities, traditional and not, in the economic systems. It shows, for the italian case, how recent development in the real estate services may positively contribute to GDP growth and produce new profitable conditions among the different and more innovative branches in the service sector.

Suggested Citation

  • Giovanna Morelli, 2009. "The Real Estate Industry and the Crisis: a Global Service Systemic Response from Property and Urban Asset Management," Economia dei Servizi, Società editrice il Mulino, issue 2, pages 169-176.
  • Handle: RePEc:mul:j1t56u:doi:10.2382/29695:y:2009:i:2:p:169-176
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