These Are The Key Factors Affecting Property Prices

We see “Property for sale” in most of the locations. At a tender age, we kept wondering what that sale was and why is it seen in almost every location. As people grow and make plans of investing in something that can prove to be an asset, people always think of “Properties”. The demand for property is high and it is on the rise for the return it promises to you in the long run because, with the increase in the economic state of a country, the property price takes a higher leap.

With the growth of the economy of every country, there is no doubt that the property prices will always be on the rise. Have you observed something peculiar about properties? They have high value at some place while having low price in some other. By property, you may refer to land, commercial building or a residential flat or a bungalow. The difference in price of properties depends on various factors. A few obvious factors are location and facilities.

This is something that any layman would understand. The better the location, the higher the price, similarly, the better the facilities, the higher the price! There are more than these obvious factors that actually influence the property prices. Let us be open to all these factors before choosing the property for purchase.

Factors that affect or influence Property Prices
Location: Properties that are located in a colony that developed and fully equipped with well-constructed roads and buildings along with facilities of the market have a higher value when compared to properties that are in interior places and less developed. This factor makes it easy to sell and buy a property too as property dealers are easily available for the job. Another important point is better transportation and communication facilities. Areas that have convenient access to road transport, as well as rail transport, have more value comparatively.

Ambiance: Is the location safe to live? This is the second factor that makes for a good rate of property. An area or locality that has aesthetic beauty together with proper sanitation and safety measures, the area is deemed pricey and so will the property price. Have you tried checking the rent of a flat in an area that is clean and green and compared the price with the rent of a flat in an area that has dirt and pollution in every step? You will know the answer. In short, it is how the ambiance makes you feel.

Approachability: Is the property easily accessible from important locations like schools, colleges, universities, hospitals, malls, etc.? Do you have available public transport for your ease to travel to places? If the answer is yes, the property price is sure to be on the higher side.

Demographics: This factor includes sub-factors like population size, consumer behavior, age factor, and income. All these are related to increasing in the property price. If the size of a population increases due to migration, there will be an increase in demand for property. Consumer behavior too makes a difference. The choice of buying and purchasing products will define the amount one is willing to spend. If the working professionals are more in the area, there are more chances of them buying a property. If there is a low-income group, the price will fall while it goes up if the income group has higher earning potential.

Bank: If the banks have come up with schemes where housing loans are provided with a lower rate of interest, buyers will definitely be attracted. With this curiosity, the property builders will have more demand for homes. With the increasing demand of homes, the supply will be less. It will, therefore, push the prices of properties up. Many people plan to buy a property with the help of a mortgage. If the interest rate is low, mortgage rate will also be low. This will increase the demand for real estate. With the increase in demand, the price goes up. The interest rate also is directly proportional to Real Estate Investment Trust. With the increase in interest rate, the REIT’s bond gets less demand, thereby declining the price of property.

Government Policies or Subsidies: Government policies like Tax credits, subsidies and miscellaneous deductions play a vital role in increasing the property price. If those policies are in favor of the common men, buyers will come up to buy a property. This definitely increases the price of a property.

These factors can either push or pull the prices of properties. These factors are for the benefit of the buyers and sellers to some extent. Instead of buying real estate properties directly for monetary gain, one can also invest in those properties indirectly. Real Estate Investment Trust (REIT), Commingled Real Estate Funds (CREFs), and Real Estate Exchange Traded Funds (ETF) are some of the indirect investments into real estate that can yield a profit.

Owing to the benefits, people have taken to investment through indirect means.