Prices quoted by district administration are not in consonance with the market dynamics and therefore does not represent the actual trading price of real estate.
There is no such procedure for property evaluation in India that developers or real estate agents adopt to derive the current market value of a property.
So, finally, it is you who has to follow the instincts!!! But be cautious. You might have to pay through your nose if you treat this as a trial and error game.
Hereon we discuss some of those important parameters that you should always bear in mind to reach the decent levels of property-valuation.
Location profile
A lot depends on the profile of the location where the property is situated. Market value of an apartment or an independent house located at a residential area near the most happening market place or office area can be more than the segregated ones. The same applies to the commercial locations.
Basic amenities: Not to mention, plush green surroundings, civic amenities like safe drinking water and systematic drainage system is what a buyer seeks.
Good Infrastructure: Good quality roads around and within the society score.
Safety and Security: People avoid locations that are closer or are known as riot prone area. Sharp declines in the prices are witnessed in areas where incidents of robberies, burglary or theft are reported within short spans of time.
Connectivity: Good connectivity with bus depot, railway station and airport is equally important. In fact, real estate in vicinity to these facilities makes sound investment proposition.
Quality Matters
Since, valuation of property is rather a process, all the above discussed factors go hand in hand with perception of quality.
Besides the tangible aspects of construction, you should also consider the intangible one like the track record of builder or developer. It’s advisable to check that the developer has all the due permissions and clearances from Municipal Corporation and other government authorities like Pollution Control Board.
Maintenance surfaces up as a major woe in the newly developed residential colonies and even office complexes. Consequently, the value of property in India at these locations tends to go southwards or vice versa.
Growth propellers
You can expect windfall gains on buying property near the site of mega infrastructure projects. It can be anything like metro rail, airport expansion or internationalization, sports stadium, Special Economic Zone (SEZ) or IT Park.
However, valuation of real estate near such sites can be tricky. The markets may overheat and you fall prey to speculative trends.
Caveat Emptor: Taking cue from same-nature transactions in the area is a good practice but not entirely. They might be paying high for a property!
Expert touch
With respect to the safety and success of your investment, you can opt for the services of professional surveyors who offer valuation services in real estate.
Moreover, good times are not far away. Indian Real Estate is maturing and systems for deriving fair property prices are in the offing.
Recently a private research firm introduced Real Estate Sensitivity Index (RESSEX) that will act as an instrument to gauge the impact of events like government fiscal decisions, change in interest rate on home loans, and other determinants, on the prices of real estate in India.
Is it the right price for this property? Perhaps this is the question that keeps on creeping in your mind ever since you make up yourself to buy or sell a property.