7 Factors Affecting Market Value of Property - An Overview

Date: 6-August,2020Last Updated: 5-August,2021
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Market Value of Property is the cornerstone of real estate sector.

These factors affecting market real estate pricing can make or break your income. Want to know how? Read on to know more!

A closer look at the economy in 2020, it is pretty clear that this year is quite tough for any industry to withstand the pandemic's pressure. Globally there has been a sudden downfall of companies and industries which were dominating the markets until 2019 but one industry that set its foot right was Real estate! Even in this volatile market where unexpected things are creating distress among people, Real estate is smoothly building its trust by strengthening its grip on the economy!

Among the globally recognized sectors, Real estate stands out! About 90 percent of investors around the globe have earned massive money by safe real estate investment. The term safe investment doesn't define itself by merely investing in real estate. It is highly essential to know the factors affecting market value of property.

The factors affecting market value of property are as follows;

1. Land Cost

2. Construction Cost

3. Building Specifications

4. Percentage of Open Area

5. Approvals from Authorities

6. Demand Vs. Supply

7. Brand Value of the Builder

factors affecting market value of property

1. Land Cost:

Nowadays, the trend is shifting towards having ease of access to the best in class social infrastructure for homebuyers. Simply put, better infrastructure and roadways, result in more demand for the property.

Land cost is highly determined on the optimum usage of the land that may result in higher returns and its neighbourhood. The more vibrant a locale is, the more demand it would create. This is one of the most critical factors affecting market value of property pricing

2. Construction cost:

It is well said that to make money, we need to spend it first! One of the factors that boost the house value is the construction cost that includes the interiors, exteriors, mechanical, paperwork, quality of materials, etc. This profoundly influences the property pricing. This is also among the essential factors affecting market value of property.

3. Building specifications

The market value of a property is majorly dependent on specifications of the building like adopting new technology, style, etc. it also depends on the quality of materials used while constructing as it estimates the durability, design, and life cycle of the building. Any poorly drawn plan may hamper the value of the house. Also, other qualities like the height, type of foundation. Waterproofing, roof covering, etc. also add to the building's specifications that further influences the property pricing.

4. Percentage of the open area:

Open space is nothing but the area is which is left free in and around the property. This is one of the significant factors affecting the market value of the property as it adds aesthetic value to the property. In recent years, many builders have prioritized the need of having a wider open area in and around the property to assist a healthy lifestyle to the residents.

market value of property

5. Approvals from Authorities:

Whether you are a home buyer or someone who wants to invest in real estate, be sure of having a checklist of major property approval documents before proceeding with the same. With the fraudulent activities increasing day by day, it is necessary to have legal and concerned authorities approvals beforehand. Having a cross-check of documents before planning to spend your money on them will also give you an idea of the builder or seller which will help you decide if they are trustworthy or not. Thus, it is highly necessary for safety and security purposes. Thus, registration and legal requirements as per the real estate norms play a significant role in estimating the property demand & is is also one of the factors relating to market value of property.

6. Demand Vs. Supply:

Unlike other investment methods available in the market, property pricing also depends on the demand and supply chain in the economy. For example, In India, after 2 years of constant demand in real estate, today, around 8 countries have witnessed about 54% decrease in the price of the home, considering it as affordable housing to make it feasible for homebuyers to buy home. It's much-needed to stay updated with government policies every now and then if you're hoping to determine variations in demand and supply.

7. Brand Value of the Builder:

Planning to buy a home is indeed one of the most important decisions in life. We have to deal with confusions and dilemmas with many builders in the market before choosing the best for us. Talking about brands, few ones like Prestige Group, Sobha Ltd might pop in your mind. However, considering the pricing aspect, it takes quality time to decide the best. On the contrary, choosing an unsung or not so famous builder could lead to a blunder. Thus, it is highly recommended to switch to a renowned builder that will sell you at a convincing rate for a safe, sound, and reliable investment.

From a long time now, real estate has been the most trust worthy investment source which is known to give higher returns in the safest way possible. That being said, considering the annual hike in market value of real estate, even during this pandemic hit, it is a best choice to invest as its a buyer's market today. However, before you plan to buy, ensure that you have a checklist of the factors affecting market value of property, as mentioned above.

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