Factors Contributing To the Appreciation of Real Estate Prices
Real estate investors look out for a good investment all the
time in order to gain capital appreciation. Investors, as well as end-users,
show great interest in buying homes, whose prices will escalate in the future.
Nowadays, end-users prefer to buy a home rather than renting it, due to the
rising inflation in property prices. There is always a possibility of
increasing family, which leads to end-users buying/renting a new home. If this happens,
one can always sell the first property in its appreciated value to get the
return on investment.
Factors Causing appreciation in property prices
So let us discuss the causes which result in the rise in the
price of a property. The capital price appreciation or the increase of a
property’s market price over time occurs due to multiple circumstances,
including:
1.
Location
of the Property: Location is the key factor for the price rise of a property
especially if we are talking about social amenities. The close proximity of
schools, offices, hospitals and shopping malls to the property ensures the
walking distance just in case. Some parents prefer to drop their kids off and
pick them up as part of a reasonable commute. The younger crowd enjoys
proximity to shopping malls and other recreational centres, which an important
role in property pricing. It is very difficult to get a property, in proximity
to all the social amenities. Concorde Mayfair is an upcoming residential apartments in Medahalli, Bangalore. where one can invest into it for ROI.
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2.
Comparable
Properties in the Neighbourhood: Comparable properties are those which are in
close vicinity of your home and impact the price of your own home. The price,
amenities and specifications of comparable properties affect of the price of
the bought property. If the comparable property has better configuration then
the bought property’s price will drop. When the bought property has better
configuration than the comparable property, then the price of former will
escalate. Comparable properties are
generally the key drivers in the appreciation or depreciation of bought
property.
3. Borrowing Cost on Home Loan: The interest rate
of home loans play an important role in the price surge of a property. The
increase and decrease of interest rates have a direct relationship with the
appreciation/depreciation of property. When the interest rates of the home
loans increases, the demand for properties decreases considerably. The decrease
of interest rates of the home loan increases the demand for properties. The
prices of the property decrease due to lesser affordability for easy monthly installments.
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