5 Facts That Influence Property Valuations In India
A property expert is nothing but an observer who keeps a tab on localities and their prices. He knows when to strike a deal and yield profit. When do property rates appreciate? When do they decline? A property seeker might be baffled. The value of a property normally appreciates depending up on various factors. Here are five facts that influence property valuations in India:
- Infrastructure development in the surrounding area is the single most important factor that influences the property valuations. This development can be in the form of roads, airport, bus terminals, malls etc. Infrastructure development in the form of easy transportation through Metro also plays an important role. The evidence of this could be seen in property valuations in and around Delhi and Bangalore Metros.
- Commercial real estate development in offices and SEZs also play a key role. With busy office lives, people prefer staying close to their workplace to save on time. This is again visible in areas like Gurgaon, Noida, south Bangalore, Mumbai Andheri-Borivili, Navi Mumbai, Pune and Hyderabad.
- Quantum of disposable income in the hands of the public is a key factor. It has been observed that neighbourhood that come around IT hubs have superior valuation compared to the manufacturing or agricultural hubs. This can be directly related to the disposable income.
- Availability of land drives property valuation. Areas where a large amount of land is available for residential purposes tend to appreciate slowly compared to areas where land is a scarce resource. Central Delhi and South Mumbai are the perfect examples of this phenomenon.
- Connectivity is another key factor. Areas that are well connected with the business and entertainment hubs of the city fetch higher valuation as compared to the areas that are not. Compare Gurgaon with Kundli, both are at same distance from the center of Delhi but there is a huge gap in their valuation.
There are other macro factors like home loan interest rate and inflation that have a bearing on the property market sentiments and therefore on it's valuation.