{"id":2919,"date":"2011-08-10T00:16:06","date_gmt":"2011-08-09T18:46:06","guid":{"rendered":"http:\/\/www.bharatestates.com\/blog\/?p=2919"},"modified":"2020-06-15T05:00:04","modified_gmt":"2020-06-14T23:30:04","slug":"what-is-real-estate-appreciation-and-what-factors-are-responsible-for-it","status":"publish","type":"post","link":"https:\/\/www.bharatestates.com\/blog\/what-is-real-estate-appreciation-and-what-factors-are-responsible-for-it\/","title":{"rendered":"What is Real Estate Appreciation and What Factors are Responsible for it?"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft size-full wp-image-2920\" title=\"appreciation\" alt=\"\" src=\"https:\/\/www.bharatestates.com\/blog\/wp-content\/uploads\/2011\/08\/appreciation.jpg\" width=\"304\" height=\"209\" srcset=\"https:\/\/www.bharatestates.com\/blog\/wp-content\/uploads\/2011\/08\/appreciation.jpg 304w, https:\/\/www.bharatestates.com\/blog\/wp-content\/uploads\/2011\/08\/appreciation-300x206.jpg 300w\" sizes=\"auto, (max-width: 304px) 100vw, 304px\" \/>Everybody may have a different reason to buy a property. Some may want their own home to live in, some would like to invest their spare money for future gains, some want to have a second home in a particular location, and some may want to have a property to rent it out for a fixed regular income in the years to come, etc. The reason may be different but one thing is same in all cases. Everyone wants to see their property rates appreciated in coming time. As that is the actual benefit of owning a property.It is the key concept behind every real estate purchase.\u00a0 Appreciation can be understood as the increment or enhancement in the market value of the property over a period of time. The actual fact is that the value of houses or apartments never appreciates at all but the value of land on which the property is built gets appreciated over a period of time. The value of houses actually starts depreciating after years of usage.\u00a0 Then the question comes how the owner gets profit on his or her property. The depreciation value is usually lesser than the appreciation value of the property as it happens in most of the cases and thus the owner of the property gets benefited. If we see the present scenario the demand for residential properties increased and for the prime locations huge group of buyers is easily available.There are various factors that contribute to the appreciation of prices of real estate in a particular area:<strong>The supply and demand ratio<\/strong>If the demand is more than supply then it is obvious that the price will rise in that particular area. If the supply is more then demand will automatically come down and in other case if the demand and supply are equal that is very rare then the price will be stagnant. But if we take a long period it is not possible things to stay the same as there will be ups and downs in the graph.<strong>Home loan interest rates<\/strong>This is another factor that potentially contributes to the real estate appreciation. When the interest rate or the cost of borrowing goes up then the cost of property will go up and thus the property rates will appreciate.<strong>Real estate market drivers<\/strong>If in a <a href=\"http:\/\/www.bharatestates.com\/pune\/industrials\" target=\"_blank\">location new industries<\/a> are coming up or already existing industries are expanding or educational institutes are opening or new infrastructural development is happening in that area for example a connecting bridge is coming up that connects the area to a national highway or a prime location of the city or any big company is opening its office there which can employ thousands of head counts then no doubt the demand in that location will shoot up and thus the rates of real estate will rise.<strong>Inflation<\/strong>Inflation is a word that no one likes to here but it is there and will always be there as it is just a mathematical calculation in percentage that shows how much we need to pay more for the same goods and services that we are currently using. It indicates the increase in price level. If inflation increases things get costlier and thus properties do get costlier because the cost of construction will increase. For example if petrol and diesel prices rise the transportation cost will increase and thus everything that needs transportation will be affected. The inflation plays important role in property price appreciation.<strong>Growth in Population<\/strong>Population growth is correlated to the demand for residential properties. The main reasons for population growth is employment opportunities in the area due to which many people migrate from other parts of city, state or country and thus the demand for <a href=\"http:\/\/www.bharatestates.com\/pune\/properties\" target=\"_blank\">residential and rented properties<\/a> increases.<strong>Development\/growth in the economy<\/strong>There is a scope of development in developing economies and this process of development drives growth in all sectors whether it is real estate sector or industrial sector or education sector. As the city grows, employment opportunities increases, infrastructure progresses and the city get a new shape and recognition. If we take example of Pune city which was known as pensioner\u2019s paradise some years back because of its peacefulness and distance from highly active metro city of Mumbai but today it has become mini Mumbai in terms of development in IT sector, automobile sector, education centres, real estate sector and we should not forget to mention that huge pool of population are migrating to the city from different parts of country due to employment opportunities. \u00a0Only in the Hinjewadi IT Park approximately 70000 tech people are working today which can double in the coming years and thus the real estate in that area will definitely go up in coming years.&nbsp;Ruchi Mahajan<span style=\"left:100%;display:inline-block;position:fixed\"><a href=\"http:\/\/rusbankinfo.ru\/\">\u0437\u0430\u0439\u043c \u043d\u0430 \u043a\u0430\u0440\u0442\u0443 \u0431\u0435\u0437 \u043e\u0442\u043a\u0430\u0437\u043e\u0432 \u043a\u0440\u0443\u0433\u043b\u043e\u0441\u0443\u0442\u043e\u0447\u043d\u043e<\/a><a href=\"http:\/\/rusbankinfo.ru\/credits.html\">\u0432\u0437\u044f\u0442\u044c \u043a\u0440\u0435\u0434\u0438\u0442 \u043e\u043d\u043b\u0430\u0439\u043d<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Everybody may have a different reason to buy a property. Some may want their own home to live in, some would like to invest their spare money for future gains, some want to have a second home in a particular location, and some may want to have a property to rent it out for a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[447,433],"tags":[],"class_list":["post-2919","post","type-post","status-publish","format-standard","hentry","category-realty-guide","category-tips"],"blocksy_meta":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is Real Estate Appreciation and What Factors are Responsible for it? -<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bharatestates.com\/blog\/what-is-real-estate-appreciation-and-what-factors-are-responsible-for-it\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is Real Estate Appreciation and What Factors are Responsible for it? -\" \/>\n<meta property=\"og:description\" content=\"Everybody may have a different reason to buy a property. 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