10 FACTORS THAT CONTRIBUTE TO THE RISE IN REAL ESTATE PRICES - Engraced Choice Properties

Engraced Choice Properties

10 FACTORS THAT CONTRIBUTE TO THE RISE IN REAL ESTATE PRICES

Factors that contribute to the rise in real estate prices
 Factors that contribute to the rise in real estate prices

Real estate has historically been seen of as a profitable asset in one’s financial portfolio, both in the short and long term. One of the select few assets that can provide you with returns that are higher than the rate of inflation is real estate. But only a small portion of the population is able to invest in real estate, and of those, even fewer are knowledgeable about how the real estate market functions and what factors actually drive price growth.

What are the Factors that contribute to the rise in real estate prices?

  1. Infrastructure Construction

A major factor in price appreciation is the improvement of the infrastructure. Any new transportation, road, or transit center will spur growth as more people are anticipated to move there, which will increase demand. Real estate investments can yield the highest returns for investors who time the market correctly.

2. Upcoming or present amenities

Think of a location without a parking space. Now picture a property akin to that, but with a parking space. This extra convenience can result in a pricing differential of 10%–15%, especially in metro areas where parking in residential neighborhoods can be difficult. Property owners can receive a greater rate than the going market rates if they keep improving their properties. This could be a kitchen lawn, a little terrace garden, or a garage in the basement. In addition, the property’s architecture, maintenance, and interiors all significantly influence price growth.

3. Regional expansion

A neighborhood’s and the social infrastructure’s ability to accommodate growth is crucial for a real estate market to increase in value. A stand-alone property located in a standard colony will not be favored over a property in a gated residential colony with a functioning residents’ welfare association (RWA). Similar factors including greenery, security monitoring, nearby amenities, and the sort of aristocracy living nearby can also boost the value of real estate. The properties may become more sought-after but their value might not increase in a region where standalone homes are replaced with independent floor buildings.

4. Policy amendments

Lending rates are a significant policy that directly affects real estate appreciation. A lower cost of financing encourages more purchasers to enter the market, increasing demand and price growth. Similar decreases in GST, income tax benefits, stamp duty rates, circular rates, etc. have a direct influence on demand.

Similar to this, the Real Estate (Regulation and Development) Act of 2016  greatly increased home buyers’ confidence. The state’s real estate regulatory authorities’ streamlining of processes and fixing of accountability on promoters and real estate builders have infused trust in the sector, where home buyers can appeal against wrongdoings like delays in possession or changes to the master plan without their consent, etc, This Transparency of any form aids in the real estate industry’s overall development.

5. Financial situation

The state of a nation’s economy is important for property appreciation. The value of money will decline if inflation is significant. As a result, a builder would have to spend more money on inputs like building supplies, labor, permits, etc. This does not, however, imply that property values will increase regardless of the development sources. Properties must satisfy a number of criteria, including accessibility, infrastructure needs, and the availability of residential properties, for prices to increase. Additionally, broad economic measures like the GDP, purchasing power parity, and unemployment rate over the long term also influence price growth.

How would you like to know the best real estate investment to start with? Right time? The right time to invest is always now! Click here to talk to us Or Check out our ongoing projects you can invest in.

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