Property investment glossary

Zero-bound Interest Rate


The lowest percentage of owed principal that a central bank can set. In monetary policy, the use of a 0% nominal interest rate means that the central bank can no longer reduce the interest rate to encourage economic growth. As the interest rate approaches the zero bound, the effectiveness of monetary policy is reduced as a macroeconomic tool. A zero-bound interest rate typically refers to the process where, by gradual steps, the interest rate approaches zero.

Zoning


Municipal or local government laws that dictate how real property can and cannot be used in certain areas. Zoning laws limit commercial use of land in order to prevent oil, manufacturing or other types of businesses from building in residential neighborhoods. However, these laws can be modified or suspended if construction of the property will serve to help the community advance economically.

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