Factors that influence property valuation
All the property seekers have certain questions in mind, like what is the right value of the property? When will it appreciate? In order to get the answer for these questions they approach the property expert. The property expert is the one who closely observes the areas and localities. He majorly considers five factors, which are infrastructure development, commercial development in the vicinity, availability of land, connectivity and disposable income in the hands of local people. These five factors if studied very closely describe the future prospects of the property valuation in the particular area:
Development of infrastructure:
The development of infrastructure like roads, airport, bus terminals, metro, schools, malls etc. is the most important factor that influences the property valuation. Development happening in the areas of North Bangalore like Yellahanka is one example of the increase in property valuation due to the infrastructure development. Because of the new international airport, the North Bangalore is witnessing a massive development and the capital property prices have seen an increase of multiple folds.
Development of Commercial real estate:
The development of the offices and other commercial infrastructure plays a great role in the property valuation. It is very important to have a balance of commercial and residential infrastructure in a locality for its growth. People like to buy a house in a locality, which has good schools, malls and offices. The increase in the valuation of property due to commercial development is visible in cities like Delhi, Bangalore, Mumbai, Pune, Noida, Gurgaon and Hyderabad.
Purchasing power:
The amount of disposable income you have in your hands is the key factor to judge your purchasing power. It is observed that the neighborhood around the IT hubs have more valuation in comparison to the upcoming neighborhood around the agriculture or manufacturing hub.
Land availability:
It drives the property valuation. The capital price of land is more in the areas where the land is a scarce resource in comparison to the areas where large amount of land is vacant to occupy. This phenomenon is seen in all the big cities of India like Delhi, Bombay etc. where there is a huge difference in the capital land value of central and outskirt areas.
Connectivity:
No one likes to live in isolation, so connectivity is another key factor. Area which are well connected to the other areas and the amenities like airport or railway station and hospitals enjoy higher valuation than the other comparable but not well connected areas. Metro in Bangalore is a very good example to discuss since even before the complete functioning of the metro the outskirt areas have seen increase in capital value of lands in multiple folds.
