Blog
November 1, 2013
Five-point Check List While Making a Real Estate Investment
Interest in a property is tied to expectation of capital appreciation from it. This is true not only for investors but for genuine buyers too. Appreciation, a key concept, is nothing but enhancement of a property’s market value over the time. Here are a few factors that influence appreciation of real estate in India.
Demand and Supply:
When demand for homes in a certain area increases, prices here rise in tandem too especially sufficient number of residential projects are not available. Self-use buyers will not hesitate to pay more for a property if they find living in the location desirable. This will in turn attract investors, who would buy properties there to sell them at a profit when supply slows down later.
This causes the property prices in that location to rise even further. For self-use buyers, the best time to buy is before investor activity starts in earnest in locations with high appreciation potential.
Inflation:
Inflation is the result of an excessive amount of money in circulation, and this over-abundance of money causes its value to fall. When this happens, prices rise. The effect will be felt on land, construction materials, labour and even legal building permits. However, inflation alone cannot push the property prices in an area if it has poor accessibility, lacks infrastructure or if there is an oversupply of projects.
Home loan rates:
The behaviour of home loan interest rates also has a direct bearing on property appreciation. When home loan interest rates increase, the demand for property slows because fewer buyers can afford to shell out the extra money. On the other hand, a decrease in home loan interest rates increases affordability and boosts demand for properties.
Real estate market drivers:
Market drivers can be defined as developments in an area that increase the value of living there. These include: the establishment of a new workplace hub (such as an office complex), shopping mall and/or entertainment complex; zoning regulations that do not permit excessive construction projects, thereby increasing the overall ambience via more open spaces, greenery, etc; transportation facilities that make the location more accessible via road, air or rail; infrastructure projects that increase the quality of living in the area (such as dedicated water and electricity supply, public gardens, etc.); and proximity to schools, colleges and healthcare facilities that reduce travelling time to essential services.
Population growth:
Similarly, population growth naturally increases the demand for residential properties there, and this translates directly into appreciation in real estate rates.
Connect With Us
Related Posts
- Real Estate Act comes into effect: 10 things you need to know about new law ( May 4, 2017 )
- Expats Living in Comfort – Hyderabad, India ( May 4, 2017 )
- MNC queue to Hyderabad grows longer; JP Morgan & IBM look for office space ( June 22, 2016 )
- An Apple in Hyderabad’s IT Garden: CEO Tim Cook’s big announcement Today ( May 19, 2016 )
- Hyderabad May get Disneyland Park ( April 22, 2016 )
- Indian Office Space Absorption Up 11% in Q4: Survey ( April 13, 2016 )
- Cognizant plans to add 8,000 people at Hyderabad facility ( March 9, 2016 )
- Ranked 139 in world, Hyderabad is Best Indian City to Live in ( February 24, 2016 )
- The Platina – Exclusive Commercial Space, Hyderabad ( February 19, 2016 )
- Apple, Inc set to open new $25 million Tech Center in Hyderabad, India by June ( February 16, 2016 )
Recent Posts
Recent Comments
Archives
- February 2018
- October 2017
- May 2017
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- December 2014
- November 2014
- October 2014
- September 2014
- August 2014
- July 2014
- June 2014
- May 2014
- April 2014
- March 2014
- February 2014
- January 2014
- December 2013
- November 2013
- October 2013
- September 2013
- August 2013
- July 2013
- June 2013
- May 2013
- April 2013
- March 2013
- February 2013
- January 2013
- December 2012
- November 2012
- October 2012
- September 2012
- August 2012
- July 2012
- June 2012
- May 2012
- April 2012
- March 2012
- February 2012
- January 2012
- December 2011
- November 2011
- October 2011
- September 2011
- July 2011
- June 2011
- May 2011
- March 2011
- November 2010
- October 2010
- September 2010
- August 2010
- July 2010
- May 2010
- April 2010
- March 2010
- February 2010
Leave a reply