What causes property prices to raise in certain areas.? A key concept behind real estate investment- is called appreciation,which is nothing but enhancement of a property's market value over time.
Real Estate investors buy property when they know that the property will gain in capital appreciation, but it is not only property investors who are attracted to this phenomenon. Real Estate appreciation takes place due to various factors including.
Real Estate investors buy property when they know that the property will gain in capital appreciation, but it is not only property investors who are attracted to this phenomenon. Real Estate appreciation takes place due to various factors including.
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- The supply and demand dynamic of a particular location.
- Home loan interest rates Cost of borrowing.
- Arrival of new real estate market drives in a location.
- Population Growth.
This causes the property prices in that location to raise even in future. The time for self use buyer to make their purchase is before investing activity starts in earnest location with high appreciation potential.
Home Loan Rates: Home loan interest rate also has a direct bearing on property appreciation. When home loan interest increase. the demand for property slows down because fewer buyers can can afford to sell out the extract money required by bank, a sufficient decrease in home loan interest increase affordability and boost demand for properties.
Real Estate market Drivers: Markets drivers can be defined has Real Estate developments in an area that increase the value of living there the area encompass many or all of these factors, which can include.
- The establishment of new work, such has office space or office complex.
- Shopping mall or Entertainment complex
- Transportation facilities that makes the location more accessible via road, rail, or air.
- Infrastructure projects that increase the quality of living in that area, such Drinking water supply, electricity supply, public garden, garbage free facilities etc..
- The proximity of schools, colleges and health care facilities that reduce travelling time.
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