Realty Factors that Steer the Property Rates
Indian real estate is on a roll since factors such as attractive investment options, growing infrastructure, limited legal hassles and relatively cheap labor attract the attention of the major real estate groups. Property valuation has also become relevant to the rapid growth in the Indian real estate sector as it is a prerequisite to all land transactions. A comprehensive property valuation report contains the value of all the major assets of a property, mode of assessment and complete analysis after prior consideration of the market scenario.
Most of the real estate consultants, agents and property valuation companies conduct valuation based on the prevalent market rates. It is always advisable to conduct an official property valuation, since the valuation report comes handy in different financial transactions.
In this rapidly growing real estate market, it is important to understand the various realty factors that define the property rates. Let’s have a look at some of the most prominent factors that drive the real estate prices in the market.
Locality
The location of a property has a significant impact on its valuation. This includes the surrounding development and the neighborhood profile of the locality. There is a substantial difference in the property rates of the commercial areas and the residential areas.Properties located in well-developed areas with good infrastructure or areas with good future expectation fetch a higher price than properties in under developed and upcoming areas.
For example, in the National Capital Region (NCR), the demand for property along the stretch of the proposed expressway called Dwarka expressway is considerably higher due to the possibility of the transfer of the diplomatic community there.
Amenities
In the modern households, the buyers are more attracted to the properties that offer state-of-the-art amenities. Investors prefer properties that offer all the necessities combined with comfortable housing. These properties offer facilities such as club house, swimming pool, modular kitchens, kids play areas, ample parking space, power backup and round-the-clock security and hence, the value of these properties is much more than those with poor infrastructure. Also, the valuation highly depends on the accessibility of proper amenities along with a comfortable living space.
Overall Infrastructure and Commercial Developments in the Neighbourhood
Infrastructure is one of the most significant factors in India that are responsible for the rise in property rates. Properties that are in close proximity to developed infrastructure like roads, flyovers, airports, malls, educational institutions and hospitals achieve a faster price appreciation than those in need of a good infrastructure. It should be noted that better connectivity influences investors as well as end-users to buy the property. Therefore, developers launch their luxury projects in areas that have a good employment rate.
Land Availability
The valuation of property highly depends on the availability of the land. The valuation is slower in areas where there is availability of land for real estate development and the property valuation is high where there is scarcity of land. For instance, a property in the heart of a city is much costlier than a property in the outskirts.
Disposable Income
There is a direct link between the property valuation and the disposable income of the potential buyers. For instance, properties located near IT hubs or commercial areas have a higher market value than those in an agricultural area.
The Demand and Supply Game
There is a significant rise in the real estate prices if there is more demand of a product and less supply in comparison. This is one of the basic tenets of economics. When the supply of property in a particular market does not meet the current demand, the value of that property is set to rise. Various factors such as changes in the population and popularity of the property in an area contribute to the increase in demand.
Economic Viability
Economic viability implies whether the price of the property suits the budget of a buyer or not. Home buyers mainly consider their income, the price of the property and the expected interest rates on home loans before investing in a property. In case the property does not meet with any of the criteria, the buyers explore other options.
Construction
The value of a property also depends on other factors such as architecture, layout, design, specifications of materials used and the lifespan of the building. The input costs, height of the building, quality and waterproofing are some of the major concerns that influence the property prices in India.
Personalisation
The valuation of personalised or customized properties is always higher than the conventional buildings as they are built to the buyer’s specifications. For example, some homebuyers demand for upgraded kitchens, best quality paint and flooring or other customised changes. These personalized modifications result in the rise of the property rates.
Property valuation depends on various factors associated with the property and as an investor, one needs to ensure that they get the fair worth of their investment before they decide to make the plunge.
