FACTORS AFFECTING CHANGES IN MARKET VALUE

Having discussed that the market value of property depends on the forces of supply and demand, let us know summarize the various factor which might influence the changes in the market value of property. Following are such factors

• Changes in building technology :the improved building techniques will certainly result in changes in value. However, the adoption of such techniques should not prove to prohibitive with respect to the cost aspect of building

• Changes in fashion and taste: Many people desire to be up-to-date with the prevailing fashion and taste and they do not like to remain behind the time. However, it will be difficult, if not impossible, to satisfy such desire as far as costly nature or property is concerned .But changes in fashion and taste to affect the values of properties. For instance the properties with concealed electrical wiring and preferred to those with the surface electrical wiring.
• Changes in proportion of single people to married people: It is quite evident that the different types of accommodation will be required for a single people and married couples. Hence, the changes in proportion of single people to married people will be reflected in the adjustment of values of the respective properties.
• Change in quality of area: If a particular pocket of a city assumed the status of fashionable or modern area, the value will go up in such a fashionable area as compared to the remaining unfashionable part of the city. Similarly, a town or a sitting may also attain such as status due to happening of certain event.

• Changes in the age of distribution of population: The changes in the age of distribution of the population of the area may also cause the changes in the value of properties. For instance, if at one particular point of time, the majority of the population is say between the age group of below 30 years, there is likely to be more demand for flats or multi-storied buildings
• Designs of property: The overall design of property may also affect the value of properties. However, the unfashionable designs may become fashionable or fashionable designs of one area may prove to be unfashionable design for other areas.
• Means of communication: The transport facility have marked effect of the value of property and the study of advertisement for property easily reveals the importance attached to the existing goods means of communication. Hence, any improvement or deterioration in the means of communication will have considerable effect on the value of properties which either benefit or suffer as a result of the change.
• Migration tendencies: Due to sudden industrialization, there is a heavy rush of people in the city and hence, the changes in property value have taken more rapidly with the corresponding dullness in the surrounding villages.

• Money supply: If money can be borrowed on easy terms or spared without difficulty for the house-purchaser, there will be a competition among the potential purchasers which may result in the sudden increase of property values. On the contrary, if it is hard to get or spare money for house-purchase, the property market will be dull and there will be sudden fall in the property values. In majority of the cases, it is found that the prospective purchasers have not enough capital of their own purchase price and the remainder is obtained by way of mortgage from a financial institution such as such as a building society, an insurance company, commercial banks, big employers like govt. or semi govt. bodies, private money- lenders etc. Thus, the lending policy of financial institutions will have marked effect on developing the effective demands from the prospective purchasers
• Planning control: The control of local authority over the planning respect of the properties has greater effect on the property values than any other single factor or possibly then all other factors combined. For instance, if the planning authority of a locality decides to convert a particular residential zone into the commercial zone, there will be sudden shooting up of the value in that area. Similarly, if the green belt surrounding the city is removed, the land values of properties in green belt will suddenly rise because such lands can easily be converted to the non- agriculture used from the agriculture use.
• Population strength: Other things being equal, the demand for properties will increase, if there is a sudden increase of population and conversely, the demand for properties will decrease, if there is sudden decrease of population. Similarly, if there is migration or population from one area to other, the values will usually go down in area which is vacated and they will be rise where settlement is made.

• Unstable time: Due to uncertainty in the in the economic or social climate of the country, the real property market may be totally upset in a relatively short time.

From the above discussion it is clear that one should not wonder if the market value estimated by a valuer is totally upset due to unforeseen development in the circumstances of the real property market.