THE real estate speculation, basically, is the process of change in land valuation, consisting in the practice of obtaining private profit from investments made on a certain land. As we know, one of the effects of the capitalist system on geographic space is the transformation of land into a commodity, which makes it subject to market variations and the general laws of that system, such as free competition and the law of supply and demand.
The practice of real estate speculation in the city's space is very common in two main ways: waiting for appreciation or making investments that encourage this appreciation. In the first case, the investor only purchases land or property so that the increase in its price is much higher than inflation in the current period, so that its future sale will generate profits real. In the second case, the investor buys a space and builds a property or carries out alterations and renovations on it, in order to make it more expensive and thus make a profit.
It is clear that many companies in the real estate sector make a living from this type of economic practice, which is very active in a country of growing urbanization like Brazil. However, this practice is also very common among individual investors, small owners that bet on the valorization of a certain location of the city to enjoy its profits later. This type of practice, however, ends up generating a series of effects on the urban space.
One of the effects of real estate speculation in cities is the land price rise. After all, if a place received an investment from a person or a company, it is to be expected that the market will try to force an increase in the purchase price to acquire profits in the medium and short term. As a result, acquiring property in regions of increasing appreciation can become increasingly difficult.
In many cases, as a result of speculation, the formation of specialized or socially differentiated neighborhoods each other. Thus, the use of this soil is intended for a specific purpose - which can be commercial, cultural, residential, etc. – causing its price to rise and speculation to perpetuate for that region in question. Many locations, unfortunately, specialize in illegal types of social practices, including drug trafficking or heavy informal labor market activity.
Another effect considered bad of real estate speculation in the geographic space of cities is the large concentration of vacant lots in some regions, as the owners keep waiting for a greater appreciation. This practice becomes a problem because some areas find it difficult to urbanize and to develop, in addition to the daily problems related to these unoccupied spaces, such as the high forest and the accumulation of garbage.
O horizontal growth of cities it is also one of the effects generated by real estate speculation in the urban geographic space. Often, the accumulation of lots awaiting recovery encourages the formation of new allotments in areas that are further and further away from the most important centers of the city. In some types of market strategy, companies build these subdivisions so that those who are in a “less worse” situation, in terms of location, are more valued. One of the effects of this is the increased need for workers to travel, the burden on public transport systems and urban mobility problems.
This dynamic is also associated with one of the main problems related to real estate speculation: the socio-spatial or urban segregation. After all, with the high valuation of the land price, in values much higher than the increase in the income of the population, the most central areas become practically inaccessible in terms of real estate, rents, taxes and others. In this way, the poorest population is practically “thrown” to the most peripheral regions, generally deprived of the elements basic infrastructure, such as basic sanitation, asphalt, in addition to many problems related to violence and marginality.
Therefore, given these problems, real estate speculation is seen by many urban planners as a serious social problem, especially when its practice is quite accentuated. In economic terms, it can also cause problems when the price of real estate increases excessively and is based on superficial values, generating what is called the "real estate bubble", which tends to burst when there is not enough consumer market to acquire so many properties at such a price. high.
By Me. Rodolfo Alves Pena
Source: Brazil School - https://brasilescola.uol.com.br/geografia/efeitos-especulacao-imobiliaria-nas-cidades.htm