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Decisive property valuation factors in India

Property Valuation in IndiaA look at recent statistics help in inferring that property valuation in India has improved. A positive trend has been attributed the following ten factors. These are given as under:

 

1. Demand and Supply

 

Prices are likely to increase if there is more demand of a product and less supply in comparison. This basic factor of economics can be extended to real estate market. Value of property goes high when supply of property in a particular market does not meet its demand. There can be various factors that contribute in increase of demand such as change in population and popularity of property in an area.

 

2. Location

 

Location of property has a significant impact on valuation of property. Properties located in renowned areas or areas with good future expectations have higher value than properties in other areas. For instance, currently in National Capital Region (NCR) demand of property along the stretch of proposed expressway called Dwarka expressway is considerably high due to the possibility of transfer of the diplomatic community here. Price of properties in an approved colony or in a well developed area will also be higher.

 

3. Disposable Income

 

Valuation of property bears a direct relation with disposable income of potential buyers. Properties located in agricultural areas are valued at low prices as compare to properties located near IT hubs or in commercial areas.

4. Infrastructure

 

Availability of good road connectivity, airports, educational institutions, hospitals, hotels, malls, bus terminals etc. in close vicinity help in escalation of property value.

 

5. Amenities

 

Properties that come with state-of-the-art amenities cost more than properties which do not provide such facilities. Properties that offer modern facilities like community halls, modular kitchens, kids play areas, ample parking space, complete power backup and round the clock security etc. have higher value. Investors prefer properties that offer all the necessities combined with comfortable housing.

 

 

6. Affordability

 

Affordability here means whether the price of the property matches with the budget of buyer(s). Home buyers basically look at three factors – namely their income, price of the property and expected interest rates of home loans. If a property does not meet with any of the criteria, they explore other options.

 

7. Customization

 

Some real estate developers also offer customized properties, where they design the projects as per the buyers’ specifications. For instance, some buyers demand for particular features in their apartments such as upgraded kitchens, flooring and paint, fittings and other specifications. Developers charge high prices for these customized properties.

 

8. Commercial Real Estate

 

A commercially developed area, primarily with respect to office spaces and retail spaces, is expected to increase property prices. For instance property prices in areas such as Gurgaon, Navi Mumbai in Mumbai, Bangalore and Noida are high as compared to other cities with commercial set-ups are under developed or in developing stages. Not only does availability of malls, corporate offices and other facilities save commutation time, but it also increases the price of residential properties in that area.

 

9. Land availability

 

In areas with ample land availability for new projects, property value is comparatively low against prices of properties in an area where land availability is low.

 

10. Structure

 

Design of the property, quality of the material used in construction, size of the property, labor rates etc. are some other factors that affect valuation of property in India.

 

A cautious investor is likely to cross check these factors on his check list before initiating a property hunt.

This entry was posted in Gurgaon, Investment, Mumbai, NCR Delhi, NOIDA and tagged , , . Bookmark the permalink.

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