FACTORS AFFECTING PROPERTY VALUES

FACTORS AFFECTING PROPERTY VALUES

Property values are determined by the interaction of the economic forces of demand and supply.

The factors, which affect property values are therefore the factors which can impact on either the demand and supply of landed property.
The followings have been identified as factors likely to have significant impact on either the demand or supply side of landed property consequently affecting property values.

1. Location
The actual location of a property has an over bearing influence on its value. People tend to be attracted to locations that are near to markets, hospitals, schools, places of employment etc. Properties in close proximity to these services thus have higher values than those that are far from the services.

2. Changes in population
Population can influence property values either positively or negatively. An increase in population in a particular geographical area will undoubtedly result in an increase in demand with a corresponding positive impact on property values. Similarly, a decrease in population within a locality will result in a reduction in demand with a negative/low impact on property values.

3. Scarcity
Scarcity occurs when the demand for landed property exceeds its supply. This situation tends to cause increase in the value of landed property. On the other hand, an increase in the supply of landed property without a corresponding increase in demand will result in decrease in property value.

4. Changes in technology
Changes in technology can affect property value. Technological inventions such as central-air- conditioning system, central sewage system, lift system, modern design and decorations can impact significantly on property values. A building with modern facilities, equipment and installation will command a higher value than a similar one without those facilities.

5. Changes in taste and fashion.
This factor is closely related to technological changes and innovations. People tend to be attracted to properties with modem architectural designs and fashionable facilities. Properties which meet this requirement are therefore highly demanded and their values higher than those without these modem facilities.