There are many factors which can affect the value of a property. The impact of each factor will vary depending on the severity of other factors.
Supply and Demand
The value of a property is generated by the interaction of supply and demand. Economic market principles control what value any product will have at a specific time. The supply of property is fixed at a particular time. To increase supply, more properties must be constructed or split into smaller units.
On the other hand, demand can shift quickly, as a result influencing property values. If supply is fixed and demand increase, the price of the product will rise because more people would want to purchase it. The increase in demand for real estate stimulate supply to generate more, which takes time, therefore, prices will boost in the short term. Moreover, change in the economic situation of buyers can also increase the demand that is if they have more income, demand will be stimulated.
For an ideal property, location is an important factor for buyers. It is considered as one of the major factors which influence the market appraisal of a property. Therefore, the prices of properties in different localities differ.
The size and area of land occupied by the property have an impact on its value. Size can be same or different which means knowing the size is useful during the appraisal procedure. The “Code of Measuring Practice” should be used as a guideline when measuring the property.