The real estate firms should put in place measures to ease the effects of inflation on their firms to ensure smooth operations. These approaches could either be internal or external to the firm concerned (Ball, 2008, p. 126). Through use of fractions, firms are able to compare their own operations in relation to set objectives and assess the extent to which they were able to accomplish the set goals. Also, they will be able to assess their performance in relation to other players in the same industry and devise means to boost their performances (DTZ Holdings Plc, 2010, P.25).
Just like the other trading activities, real estate businesses are influenced by the prevailing market forces (Sunday Mirror, 2011). The real estate must implement tactical decisions to ensure their survival during financial meltdown. Inflation has profound consequences on both businesses and individual consumers. Due to decline in purchasing power, the consumers tend to buy less of product and services with the same amount of money than what they could purchase before the occurrence of recession (DTZ Holdings Plc, 2010, P.46). This is caused by the fact that recession result to increase in prices of the basic consumer commodities which is similar to decline in consumers’ income. Therefore, consumers are required to spend more funds to acquire similar amount of goods and services they used to enjoy before the occurrence of recession.
Recession also results to decline in saving ability of the consumers (DTZ Holdings Plc, 2010, P.46). As the prices of commodities and other facilities like housing goes high, the consumers have to allocate greater proportion of their earnings to the basic commodities like food, education and healthcare hence leaving small or no funds at all for savings. Both individuals and the organizations have to devise other means such as innovations to create