subject: Property Value Increase - Top 4 Reasons Why Properties Increase Value? [print this page] When you say "real estate" or "properties", then the word you can easily attribute to it is "business". That's right; real estate property is a hot commodity in the business world due to its continuously increasing market value. Property investors from all over the world are looking into new properties to venture and hope to acquire one that promises a profitable long-term goal.
But the question still stands: "Why properties increase value?", "What are the different factors that affect the increase?" Read on and be enlightened with the information to help convince you that property investment is your yellow-brick road to success.
Population Increase Contribute To A Property's Price Increase
The continuous growth of population has contributed much to the increase of market value in both residential and commercial sectors today. To put it simply, the more people there are that has enough money to buy properties, the more likely the prices will go up due to the demand. That is the basic law of business. The more buyers out there with fewer properties available, the higher the price would be.
It is a good idea to invest in a property located in an area where the population is near to bursting. Let's use Melbourne, Australia as an example. Melbourne is known to be the second most populated area in Australia. To date, there are around 3.9 million people in it -- and imagine the numbers of investors who are looking for a property to put their money on. Expect the prices of properties in the city to be expensive, but the returns you get from the future should be more than what you paid for in the end.
Price Increase Due To Location
Location is also a factor why the prices of properties are always on the rise. Land prices tend to go up as the demand for it increases, as well as surrounding facilities that contributes to its popularity and functionality. For example, it would be most profitable to invest in a residential property that is near popular facilities, like malls, schools, tourist attractions, and the likes. The same can also be said on commercial properties with easy access to residential communities for a better market.
Increase On Raw Materials
The price of the property is now wholly based on how much the land is worth or how many are looking at it with interest. The price may also increase due to the raw materials used to put up the property, or the amount needed to improve it.
Basic raw materials for improvement or putting up a property are always on the rise due to demand. When the prices of improvement increase, then it would be a big possibility that its purchase price would rise up as well. It is almost impossible to find a cheap property when the raw materials that makes up its structure is expensive.
Law Of Supply And Demand
Investors should understand that the prices of properties increase according to the law of supply and demand of business. When the demand is high, yet the available goods are low -- then you can be sure that the prices would skyrocket to astronomical figures. If the demand balances the availability of goods, then a fair market value is evident. Too much supply of goods with low demand leads to an extreme price drop that is a boon for investors.
