What factor can reduce property demand in the real estate market?

High-interest rates can significantly reduce property demand in the real estate market because they directly affect the cost of borrowing money for home purchases. When interest rates are elevated, mortgage payments increase, making it more expensive for buyers to finance a home. This can deter potential buyers from entering the market, leading to decreased overall demand for properties.

Additionally, when faced with higher borrowing costs, existing homeowners may choose to remain in their current homes rather than refinance or move, further slowing the turnover of properties. As a result, fewer transactions occur in the market, ultimately leading to a decrease in demand.

In contrast, lower property taxes, increased employment opportunities, and high population growth generally contribute to higher demand in the real estate market, as they can make housing more affordable, increase consumers' purchasing power, and create a larger pool of potential buyers.