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Pakistani real estate market has gained momentum for the past few decades now. Investors take it as a great new horizon to invest and gain profits making the market more attractive for new investors both mid-term and long. Investing in the real estate market is not easy. There are multiple factors that impact the market and it is essential to gain knowledge before making any move to invest. In order to understand the fluctuation, we must study the factors individually. Although there are many elements including, demographics, economic growth, affordability, laws and policies, etc.
Here are a few which are majorly the game-changers.
1. Locality
The first and most essential element is the location of the property. The better the location the higher the price. Hence, the properties in the city centre are highly-priced than the properties in the outskirts. Locality controls a lot of other factors including, commute, and access to facilities. Nearby parks, schools, facilities and proximity to the city are all great value additions; therefore, govern the price of the property.
If you are buying a property, the locality needs to be of the utmost consideration. In Karachi, the most considerable areas are, DHA, Clifton, PECHS and SMCHS etc. Similarly, if you are buying in Islamabad, localities like DHA, I8, Bahria etc. are to be taken into consideration. Lahore on the other hand is famous for Cantt, Model Town and DHA.
No matter if you are investing commercially or buying a house, location is the first element that is to be considered. Although this will be highly-priced than the others, this is a factor that needs important consideration before making any decision.
2. Physical State
The second in line is the condition of the property. Sometimes the condition of the property is zero and the only money involved is for the location and plot size. In order to invest in property, conditions play a vital role. If you are interested in buying a newly built house you might have to pay more than in buying an old construction. It is always preferred that you buy a well maintained or new property rather than investing in a property in a poor state.
The condition of the property includes both interior and exterior. A critical and deliberate inspection of the property is essential. Before finalizing the deal, check
for everything from wall paint to fixtures and furnishing; each plays an important role in accessing the condition of the property. You don’t need a house that requires a lot of repair and maintenance if you are paying a hasty amount of money,
You can negotiate the price, after the condition of the property is accessed. The price can be negotiated if you find any issues with the state of the property. Anything which is damaged or broken can help you in negotiation. This negotiation will save you some money to uplift the condition of the bought property.
3. Curb Appeal/Surroundings
The major element that adds value to the physical state of the property is the quality of its surroundings. If the property is surrounded by low rated shops like mechanical etc., the value will be low. The surroundings can be enhanced and this enhancement will add value to the property price. The overall look and feel of the property make it more expensive.
A good car garage, plantation outside the property, a decorative driveway and lights can multifold your profit. This is one aspect that can be worked on anytime. If your house looks good from the outside you can always ask for more price resulting in more profit.
4. Government Laws and Policies
Policies of the place where you live or intend to buy property also have a great impact on its valuation. Change in policy causes a fluctuation in price. For example, the recent change in the law for portion buying has caused a decline in the price of portions.
While buying a property of any sort, you must check the policies which are currently prevailing.
5. Installations & Facilities
Ease to live is the new standard of modern society and locality. And normally, all the newly constructed property whether apartments, gated communities or societies all are in competition to provide customers with all that can possibly be arranged.
Generators, elevators, community halls, gyms, swimming pools, parking, electricity, water supply all are a part of installations and facilities. Most people
prefer PECHS over DHA just because of the constant water supply. The older communities and property where there is a lack of such high-tech facilities are often priced less.
Access to Public Transport is another plus to property rates. Other facilities include, supermarkets, hospitals, parks all add value to the property in the vicinity.
6. Security
No one is willing to buy property in an area where security is a question. Everyone expects a safer and secure environment. Locality and security go hand in hand. As security depends majorly on the location of the property.
Gated communities and societies are a new bandwagon. The 24/7 security of these gated communities is a value addition, which cannot be ignored. The addition of guards, CCTV, high-tech security alarm makes the property more valuable.
7. Demand & Supply of Property
As the world is changing, so is the choice of people. The trend of buying an apartment with a scenic view in a high-rise building has increased the demand for such a type of property and hence the prices are higher.
Most people are interested in buying property in city centres creating an over edge demand. As per the rules of economics, the higher the demand higher the price. Whereas, in the areas where there is an abundance of property available and less demand the prices are lower. On the other hand, if the prices are too high, the demand falls resulting in an imbalance of supply and demand.
It is essential to study the demand and supply of property before buying one.
Above mentioned factors are the basic ingredients of property valuation but are not limited to these. There are many factors that govern the price of the property. It is important to study each factor before making a big decision to invest in property. This article is written to educate people about property valuation. We intend to provide assistance to everyone for any upcoming property matters.