Elements that appreciate the value of your property

When it comes to one’s investment portfolio the real estate investment has always been considered wise. Property investment offer ROI like no other returns because it always pays a handsome amount which values is above the inflation rate.

There are only a few individuals who are able to invest in real estate and out of those few there are very few who are able to make a wise decision.

Development of infrastructure

Infrastructural development in the vicinity of your property plays an important role in appreciation of your property. Any development like transit hub, roads, facilities, institutions, etc. could be the main cause behind the appreciation of the value of your property. Investors who timing the market well can maximise their return on real estate investment.

Available or future amenities

Think of a location without a space for parking. Now picture a property akin to that but with a parking spot. This extra amenity might result in a 10%–15% pricing difference, especially in urban areas where space for parking in residential neighborhoods can be difficult.

Property owners might receive a greater rate than the going market rates if they keep improving their properties. This may 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.

How countries economic situation helps in appreciation of property value?

Yes, it is true that country’s economic situation also have implications on the appreciation of the real estate property. Due to high inflation the currency value will depreciate, which simply means that the construction companies have to bear the increased expenses from their pockets for the expenses like labour cost, building material cost and tax to government authorities. 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 supply of residential properties, for prices to increase.

Besides, the financial indicators from economy of a country like purchasing power parity (PPP), rate of unemployment etc. plays role in cost growth for long.

For example:

GDP and Property Market link:

Compared to Asia, which has roughly 60 percent of the earth’s population, the region’s contribution to global output increased from less than 30% in 2000 to almost 40% by 2014. Asia contributed about 2/3 of the world’s GDP growth during the past several years in terms of yearly growth. Figure 1 shows the breakdown of global GDP growth from 1990-2014 by region.

Since money must be saved up in order to purchase a home, the co-integration of GDP development and property capital returns makes sense for residential real estate. With just a few modifications, income may be directly determined from GDP.

According to research from  Europe, Asia, and the US, the median housing price and GDP per capita are correlated by anywhere between 60% and 95%.  The long-term growth tendencies of the two cycles often line up with one another. High correlations between the GDP and property values may not always exist, though.

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