Key Factors of Land Appreciation

The Best Investment on Earth is Earth. 90% of millionaires become so through owning Real Estate. More money has been made in real estate than in all industrial investments combined. The wise young man and wage earner of today invests his money in real estate.

Real estate investors are always keen to buy a property when they know that it will gain in capital appreciation. but it is not only property investors who are attracted by this phenomenon. There is also greater interest from end-users for buying rather than renting homes since real estate appreciation means that their asset becomes a greater source of financial security going forward.

Factors that cause property prices to appreciate

So, what is it that makes residential property prices increase in some locations? The phenomenon of capital value appreciation or growth of a property’s market value over time happens because of various factors, including:

1. Demand and supply

When there is increasing demand for homes in a certain area, property prices go up if the amount of residential real estate projects being built to meet the demand is not catching up fast enough. Areas where direct employment are created demand for residential properties increase. Growing industries give rise to the demand for residential property. Investors should watch out for the new industrial cities where direct and indirect employment are created. This leads to a huge demand for residential properties.

2. Property market drivers

With specific pertinence to residential real estate, the term ‘market drivers’ refers to all and any developments in an area that positively impact the desirability and convenience of living there. These can include:

 • The development of new office complexes in the area.

 • The arrival of a shopping mall or hypermarket.

 • The proximity of educational institutes and hospitals which reduce traveling time to such important establishments.

• Zoning regulations in an area that prevent excessive development from happening to cause further densification, thereby, preserving the available open spaces, greenery and overall ambiance of the location. This is nicely planned in the cities being built new and the government has taken care of all the above points which makes a city livable.

3. Public Transport Facilities

Public Transport Facilities which ensure that the location is accessible by road, rail or even air. The investor has to find the location where the air road and rail transport facilities are available which can facilitate mobility. The cities that are recently being built by the government, the government has taken care of the wide roads, broad expressways and unlimited bridges so that the traffic problems do not arise. Railways and airports are being built for national and international connectivity.

4. Population growth

The growth of population in a location obviously results in increasing demand for housing. Increased demand directly translates into faster appreciation in real estate prices and so denser area will have a higher appreciation rate than the less dense locality. It is a human trait that people prefer to be near a public favored locality. India is the 2nd most populated country and the 7th largest as per area which is a boon to us. When in new cities employment opportunities, public utility services, and transport facilities are available all in one place people tend to migrate more and the demand for residential property increases and so the prices to increase.

Other factors that can be counted as the key factors of land appreciation are fiscal inflation and cost of borrowing i.e. interest rates. Inflation is caused by excess money is in circulation, which essentially causes the value of money to reduce. When this happens, the prices for several input items like the cost of land, construction materials, construction labor, and statutory building permits, also increase. The upward or downward movement of home loan interest rates has a direct correlation to real estate appreciation. When the cost of borrowing increases, the demand for homes slows down because few buyers can afford the higher EMIs.

India is moving towards urbanization, and all the factors that affect the price of lands are at one place. so the investors must look upon these new opportunities. KK Realty brings you the opportunity to invest in such high appreciable lands at India’s First Smart City Dholera SIR, Gujarat.

We have residential plots for investments with high returns starting at just Rs. 5 Lakhs.
To know more call us on +91 983 311 7731, you can also email us on archana@kkrealtygroup.com

Happy Investing!