In the real estate business, the ultimate objective, regardless of whether you are purchasing, selling or investing, is to earn a decent profit. However, property value does not remain constant. It may increase or decrease over time, which depends on a lot of factors. What then has the most influence on property value? Is it where the property is? The remodeling and improvement you have done? Or whether you buy or sell at what time?
The fact is, it is not a single factor. Property value is determined by a combination of various elements such as location, timing, improvement, infrastructure, as well as market demand. We are going to discuss each of them in simple terms below and how each can assist you in making better decisions.
1. Location: The Foundation of Property Value Which Does Not Change
The thing that matters most about property value is location-because one cannot change it. Even a small house or not using new upgrade in a good location will tend to be more expensive than a larger or better house in less sought after location.
What is the Value of a Location?
To illustrate the major location factors, which can enhance the value of a property, let us look at them in detail.
Proximity to Everyday Needs: Houses that are close to schools, shops, parks, hospitals, and the mode of transport are more appealing. Individuals will pay higher prices to stay close to the places they visit daily.
Safe and Clean Areas: Buyers want areas that are quiet and have clean streets with low crime. This makes them feel better and safe.
Good Views or Good Locations: Sea facing apartments, city skyline view (such as views of the Burj Khalifa) or apartments in popular locations such as Downtown Dubai or Palm Jumeirah command a premium.
Near Work Opportunities: Locations that are near business or office centres are desirable as individuals prefer living near their workplaces.
Room to Grow: Just because a location is not very popular at the moment, does not mean that it will not have an increased value in the future when new amenities such as metro stations, malls, or parks are scheduled near it.
Example:
A tiny flat in Downtown Dubai can be more expensive than a large house in the suburbs– simply because it is close to tourist attractions, has improved transportation, and a fabulous lifestyle.
2. Renovations and Upgrades: Value You Can Add
You can change and improve things within your property as opposed to location which you have no control over. Intelligent home improvements can boost the value and the attractiveness of your home to potential buyers.
Home Renovations That Can Increase Property Value
So which upgrades are truly valuable ones, and which are worth the money?
Modern Kitchen: A modern kitchen means clean, stylish and fully equipped kitchen that can add up to 5 percent value to your home. New countertops, energy efficient appliances, good lighting, etc. all make a difference.
Price: It begins at 5,000 and could reach a lot more in case you want to get luxurious ones.
New Bathroom: A good bathroom with new tiles, walk-in showers and quality taps and sinks can add 10-20 percent.
Price: $10,000-20,000 on average.
Energy-Saving Features: Including such features as improved insulation, windows with two layers of glass, solar panels, or air conditioners that consume less energy will reduce the cost of energy.
Value Add: 5-25 percent based on the amount you do.
The reason it works: There are now more buyers interested in environmentally friendly homes that are also less expensive to operate.
Easy Touch-Ups: Painting, new flooring, or more adequate lighting can give your home a new fresh feel and well-maintained.
Value Addition: 5-10 percent. Just minor adjustments may do wonders when it comes to the attitude of the buyers towards the house.
Utilizing Extra Space: The extra space you create by converting an attic or a basement into a bedroom or office is valuable space–space that can add to the value of your home.
Touching up the Exterior: A clean garden, fresh paint on the exterior walls or a neat front door area can provide your property with a good first impression.
Outcome: Can help to get more buyers and can make the house sell quicker.
A Smart Tip: What is Worthwhile
Always weigh the price of your upgrades against the value that they will actually bring. Not all properties have good ideas of renovation. As an example, installing expensive materials in a medium level location may not pay you back what you invest.
3. Timing: The Time of Sale May Be as Important as the Product Sold
The prices of property increase and decrease according to the market. One way of making more money is by selling at the right time. When to sell and at what price may be the wrong time and a long wait.
The Influence of Timing to the Value of Property
Here is why it can prove to be a big deal in terms of your profit when you buy or sell at the right time.
Market Conditions:
When lots of people want to purchase, but only a small number of homes are on offer (seller market), then prices tend to increase.
In case the number of offered homes is too high and the number of buyers is low (buyer market), prices remain unchanged or decline.
Economic Situation:
Major events such as inflation, pandemic, increases in interest rates or fluctuations in oil prices can influence the readiness of people to purchase. When individuals are insecure they tend to withhold on major purchases such as houses.
Time of Year:
There are places where houses are sold more quickly in spring and more slowly in winter. The best time to sell can be influenced by such factors as expats moving into a city, school enrollment and tourist seasons in the case of Dubai.
New things around the corner:
When a new metro station, shopping mall or business center is constructed around your property, they may increase in price- sometimes even before the project is completed. Customers prefer expanding and more connected places.
Simple Advice:
Unless you are in a hurry to sell, monitor the market. Attempt to sell during the time when more people are wanting to purchase a home and there is less supply of homes in your region. This can assist you to get a good deal.
4. Infrastructural Developments: Huge Incentive to Property Prices
Dubai never stays the same. Once new roads, metro stations, malls, or parks are constructed, some parts become more popular and the price of the houses can increase rapidly.
Infrastructure Types Which Can Increase the Value of Property
So what are the types of infrastructure that would increase the value of a property to the buyers?
Transport and Roads:
There are new metro stations, new highways or improved bus routes. Individuals prefer to live near their workplace or school thus they will be willing to spend more on houses in convenient locations.
Example: When a new metro line is commissioned in the vicinity of a neighbourhood, the value of homes in the neighbourhood tends to increase.
Community Facilities:
Places such as parks, schools, hospitals, shops and places to go and have fun make a place more comfortable and family friendly.
Example: Dubai Hills Estate gained popularity due to the fact that it provides the entire lifestyle and everything is in the vicinity.
Well-Known Projects or Landmarks:
The presence of big new buildings or business centers (such as Dubai Creek Tower) makes the surrounding areas more appealing. Individuals prefer living near such hot spots, and this increases the cost of property.
Airport and Travel Access:
Houses in places that have good transport connections- particularly to those who travel frequently- can be sold at a better price.
Simple Advice:
Find out what projects are planned in the neighborhood before you purchase or sell. It does not matter whether something is constructed or not, merely the announcement of it can increase the demand.
5. Supply and Demand: The Reason Why Prices Increase or Decrease
Prices may fall even in a great location where there are many homes on the market. However, when the number of people wishing to own homes is high and the supply is low, the prices can go up in a short period.
What Causes People to Want to Buy (Demand)?
Let’s examine the key factors making people ready to purchase a home.
- Increased Population: As more people find their way to a city more houses are required and demand increases.
- Low Interest Rates: At times when it is cheaper to borrow money in the bank, more people will be able to afford to purchase homes.
- Investor Interest: When foreigners begin to purchase property particularly in Dubai, the market becomes hotter.
- New Government Regulations: New Government regulations such as new easy visas, residency schemes or tax incentives can bring more buyers.
What Influences the Supply of Homes?
We will deconstruct the key factors governing the number of houses available in the market.
- New Housing Projects: Supply goes up when a large number of new buildings or homes are constructed.
- Slower Building: When the construction of new homes is delayed or slowed, there will be fewer homes available, and that can maintain high prices over some time.
- Government Rules: Regulations on land use, building, or property laws can make more or fewer houses be constructed.
Quick Tip: Never buy or sell without looking at both supply and demand. When there are lots of people who need houses and not so many on sale, this may be a good time to sell.
6. The New Way Homes Increase Value: Energy Efficiency and Green Features
Nowadays, consumers not only consider how pretty a house is, but whether it will be cheap to operate. Energy-efficient homes can make people save money in the long term, thus they are ready to spend more on them.
What Makes the Home More Energy Efficient?
Here is what we will consider to be the main characteristics that increase energy efficiency and really save in the long-term perspective.
- Solar Panels: These will assist in cutting down electricity bills as sunlight is used to supply the house with energy.
- Good Insulation and Double-Glazed Windows: These maintain the home warm in winter and cool in summer and you consume less energy.
- Energy Saving Heating and Cooling Systems: New systems consume less energy, and they maintain the rooms at comfortable temperatures.
- Smart Home Features: Smart thermostats, lights and appliances will automatically conserve energy.
Buyers Perspective
As the cost of electricity and cooling rises, individuals are now opting to live in houses that would enable them to save more money on a monthly basis. In others, it is only necessary to add energy-conserving items to boost the value of home by 15-25%.
7. First Impressions Count: Property Condition and Maintenance:
A home with the best location will fall in value in case it appears worn out. Clean, well-maintained and move-in-ready homes tend to get more serious buyers and often sell quicker. Below is a list of what to maintain in shape:
Roof and Walls
Ensure that it has no leakages, cracking, or other forms of damage.
Plumbing and Wiring
The electric system must be safe and up to date and pipes should not drip.
Neutral Appearance
New paint and plain colors assist the buyer to envisage his/her furniture in it.
No Pests
It is a big plus to demonstrate a home that is free of pests in warm or humid locations.
Quick Tip: Have a little inspection before you list your home. Early repair of minor issues creates confidence with customers and will not lower the prices when negotiating.
8. Digital Appeal: The look of your online listing is important
Nowadays the majority of buyers begin their search on the internet. When your property photos are poor or when the detail is blurred, people will overlook your listing- even when the house is good.
Your online listing must be unique, understandable and evoke a feeling in people in order to appeal to serious buyers in a short amount of time. This is how to achieve that:
Apply Professional Photos
A good first impression is made because of good pictures. Sharp bright pictures allow the buyers to visualize the space and envisage living there, which is possible even before they come to the location.
Provide 3D Walkthroughs or Virtual Tours
These allow online touring of the house by the buyers. It makes them familiar with the layout and more attached to the space-this can be useful to buyers who are not nearby.
Write Open and Frank Descriptions
Do not simply enlist the number of rooms. Paint a picture: what it is like to be in the space, what can you do with the space, what lifestyle can it provide. This creates confidence and curiosity.
Flash the Best Features
Tell them what is unique about your property, whether it is a modern kitchen, the proximity of the metro or solar panels. It is these features that can make your house outstanding among others.
Final Thoughts
What then is the greatest influence on property value? The foundation is location. Upgrades and energy efficiency add value. Time plays on market motion. Infrastructure increases desirability in areas. Upkeep and appearance clinches it. The factors are in harmony with one another. You can pay the price of ignoring one. However, when done the right way, it does not only add value to property, but it also maximizes your profit potential.
Are you a property owner or property investor who wants to learn how to maximize the value of your property or sell at the opportune moment, Roots Heritage Realty can give you professional advice and personalized approach. Contact us now to receive a free and no obligation consultation.