Factors That Appreciate the Property Prices
Jun 01, 2017 Real Estate News
Real estate investors are always keen on buying properties as a safe investment. But not only it is a safe investment for investors, but also for buyers who intend to use it for their own purpose. There is always a greater interest from end user buyers to buy the property rather than renting a house since the prices of properties increase with time. It also promises a greater financial security in future. If a person wishes to sell the property in future, it is expected that the property will fetch more money than it was invested while buying.
So what affects the prices of properties? We discuss them here.
The capital value appreciation or growth or property’s market value happens due to certain factors like:
1. Demand and supply dynamics:
When the demand for property in certain location goes up, then the property prices of the area goes up as well, if a number of properties being constructed in the said location don’t meet the demand. To put it simply, buyers are ready to pay a higher amount for the property if the location is desirable. End user demand; also influence the investors to buy the property for investment purpose. Investors put up the property on sale after the demand has reduced but the price of the property keeps going up. The ideal time for end users to buy the property in the areas with high potential appreciation is the time when the investors haven’t yet started to invest in the area.
2. Fiscal inflation:
Fiscal inflation is caused by the excess amount of money in circulation, which reduces the value of money. Whenever inflation hits, the prices of many commodities, land, property, etc, goes up. Though, inflation does not increase the price of the property which is in the area that is deficient in proper infrastructure and basic necessities.
3. Home loan rates:
The home loan rates are inversely proportional to the demand. If the loan rates increases then the demand of the property decreases since not many buyers can afford to pay a higher EMI. Also, when the loan rate decreases, then the demand for property increases as more and more buyers want to take advantage of the home loan rates and fulfil their dream of buying property.
4. Increased population:
The growth of population increases the demand for properties. The increase in demand raises the property prices.
5. Market drivers:
Market drivers in terms of real estate refer to future infrastructure development in the area, proximity to educational institutes and offices, connectivity to the airports and railway stations, accessibility of open spaces, etc. These increase the price of the property.
So what affects the prices of properties? We discuss them here.
The capital value appreciation or growth or property’s market value happens due to certain factors like:
1. Demand and supply dynamics:
When the demand for property in certain location goes up, then the property prices of the area goes up as well, if a number of properties being constructed in the said location don’t meet the demand. To put it simply, buyers are ready to pay a higher amount for the property if the location is desirable. End user demand; also influence the investors to buy the property for investment purpose. Investors put up the property on sale after the demand has reduced but the price of the property keeps going up. The ideal time for end users to buy the property in the areas with high potential appreciation is the time when the investors haven’t yet started to invest in the area.
2. Fiscal inflation:
Fiscal inflation is caused by the excess amount of money in circulation, which reduces the value of money. Whenever inflation hits, the prices of many commodities, land, property, etc, goes up. Though, inflation does not increase the price of the property which is in the area that is deficient in proper infrastructure and basic necessities.
3. Home loan rates:
The home loan rates are inversely proportional to the demand. If the loan rates increases then the demand of the property decreases since not many buyers can afford to pay a higher EMI. Also, when the loan rate decreases, then the demand for property increases as more and more buyers want to take advantage of the home loan rates and fulfil their dream of buying property.
4. Increased population:
The growth of population increases the demand for properties. The increase in demand raises the property prices.
5. Market drivers:
Market drivers in terms of real estate refer to future infrastructure development in the area, proximity to educational institutes and offices, connectivity to the airports and railway stations, accessibility of open spaces, etc. These increase the price of the property.
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