What influence does population growth have on real estate?

Population growth has a positive impact on real estate due to the increased demand for housing and commercial space that typically accompanies a growing population. As the number of residents in an area rises, the need for various types of properties—such as residential homes, apartments, and office buildings—expands to accommodate the larger population. This heightened demand can lead to increased real estate prices and rental rates, making real estate a potentially lucrative investment.

Moreover, population growth can stimulate local economies, leading to job creation and further driving the need for real estate development. As more individuals and families move into an area, the demand for services, schools, and infrastructure increases, which can enhance the desirability and value of real estate investments in those areas.

The other options do not accurately capture the relationship between population growth and real estate. A negative impact on demand is counterintuitive, as a growing population typically increases demand. A neutral effect on investment returns overlooks the substantial ways that population growth can affect the real estate market positively. Restricting the impact to only commercial properties disregards the broader implications for residential markets as well, as population growth affects both sectors equally.