In the dynamic landscape of real estate investment in India, owning real estate, residential and commercial, is not just a symbol of prestige but a promising venture. As other investment strategies recover from the unforeseen impact of Covid-19, the real estate sector continues to flourish. This flourishing path to wealth, however, demands a substantial commitment of both money and time from investors. However, making the right purchase requires knowledge of the property's fair market value and a fair few questions might arise before you make a decision. What is the right place to invest in? What is the value of my property? What would be the ROI on my property? Is it too cheap? Is it too expensive? If that's the case, what's the reason behind it? As an investor, you should seek answers to these questions before making a purchase of a property. The process may seem overwhelming, but don't worry. With that being said, PropReturns has curated a checklist of factors that affects pricing and the value of a property in India.
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Unveiling the True Potential: Identifying Property Value
The crux of successful property ownership or investment lies in identifying a property's potential, a task laden with challenges. With the Indian real estate market on the rise, millennials are actively participating in the journey to wealth creation. The government's release of draft guidelines for Real Estate Investment Trusts (REITs) in the commercial real estate segment adds a layer of reliability for retail investors entering the market.
Yet, many questions may arise before you invest in a commercial space. What is the fair market value of a property? Is it overpriced? What factors contribute to its value? Will it be a sound investment? What would be the return on my investment? If I am renting out the space, what would be my rental income? As an investor, answering these questions is essential before making an investment. In this complex landscape, PropReturns has curated an insightful checklist of factors influencing property pricing and value in India.
Location: The Epicentre of Property Value
One of the foremost factors influencing commercial property value is its location. Proximity to civic amenities, including recreational, entertainment, and shopping centres, as well as airports and hospitals, plays a pivotal role. Employment opportunities, quality of infrastructure, and security systems further contribute to the property's value.
According to JLL India, key cities witnessed a remarkable 8% YoY increase in net office absorption in the third quarter of 2021. Delhi-NCR, Mumbai, and Pune collectively accounted for approximately 62% of the recorded volumes, emphasising the significant regional variations.
Amenities: Elevating Property Valuations
Properties boasting modern amenities and superior infrastructure command higher valuations than their counterparts lacking essential facilities. Proximity to entertainment hubs, medical facilities, educational institutions, retail markets, and corporate areas elevates property values. PropReturns emphasises that property valuation is intrinsically tied to the availability of amenities associated with comfortable living.
Transportation: Connectivity as a Cornerstone
Connectivity through transportation is a pivotal factor that can make or break a business. Well-connected commercial spaces, especially those linked to public transportation, hold immense appeal for working professionals. Public transportation not only enhances accessibility but also aligns with the cost-effective lifestyle choices of potential buyers.
Design and Condition: The Aesthetics and Structural Integrity
The condition of a property, whether it's a new development or a decades-old structure, significantly impacts its value. Buyers scrutinise properties for any repairs or remodelling work, weighing the current fashion trends. Remodelling can either enhance or diminish a property's appeal, depending on its alignment with prevailing styles.
Availability of Land and Disposable Income: Influential Variables
The availability of land for real estate development directly affects property values. Areas with ample accessible land witness a slower rise in property worth compared to regions where land is scarce. Property values also correlate with the disposable income of the buyer or the majority of the population in the area.
Supply and Demand: Driving Property Valuations
The dynamics of supply and demand are crucial determinants of property valuations. As the availability of real estate declines, property values rise. Population shifts are key drivers of demand, with the popularity of a locality contributing to an increase in property prices.
Economics: Affordability as a Decisive Factor
Affordability, the link between interest rates, property values, and earnings, plays a decisive role in property ownership. When any of these variables reaches its maximum in a given location, property owners seek better living conditions elsewhere.
In Conclusion: Navigating the Real Estate Landscape
In conclusion, a multitude of factors, as outlined above, contributes to the escalation of property prices. Before diving into real estate investment in Mumbai or any other Indian city, investors should meticulously analyse these driving forces to gain a fair valuation of their prospective properties.
To support those venturing into Commercial Real Estate, PropReturns offers a curated list of verified properties on its hassle-free online platform. Investors interested in real estate investment in Mumbai, Navi Mumbai or Pune can explore the platform for verified details that align with their investment goals. Visit PropReturns and unlock the gateway to data and insights on commercial properties available for investment and sale across India. Your journey to prosperous real estate investment begins here.
