Property Value – 5 Factors that Have an Impact

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If you work with real estate or need to have any kind of dealings with the industry, you will benefit from understanding how property value works. RM Properties would like to tell you about those important factors that ultimately affect any property’s market value.

Location, Location, Location

This is a cliché for a reason, as it’s one of the most important factors that affect any property’s market value. If the property is located in a busy city, it will have a different value from a similar property located in a rural area.

The amount and nature of businesses and services available nearby the property’s area are also to be considered.

Finally, the better the reputation of the area in which it is located, the better the appreciation for the property will be. Keep in mind that things like crime rates and culture of the area’spopulation have an important impact on any neighbourhood’s reputation.

Supply and Demand

The law of supply and demand applies to every single market the same way and real estate is no different. If many people are hoping to get a small number of properties available, real estate agents are able to hike up the prices in the midst of competition.

However, if there is a high supply of properties with little demand, the prices will go down.

Interest Rates

The interest rates are ruled by the Reserve Bank’s monetary policy. In the event of the bank raising its cash rates, all lenders will need to increase the rates they have established for loan interest. This results in a drop in real estate prices, as the demand for mortgage properties goes down when people find that they will have to pay too much.

However, the situation is inverted when the Reserve Bank lowers its cash rates, as interests can be lowered as well and real estate properties become more affordable. The demand increases and the prices along with it.


If a property is easy on the eyes and gives an excellent first impression, it will be more expensive than a similar one that isn’t all that appealing at first sight. Keep in mind that this refers mainly to the way it looks on the outside.

Renovation Potential

Many people are big in renovations or simply can’t afford to buy a property with the size and facilities they need. For these people, the renovation potential that a property has is crucial, as it allows them to wager whether or not the place fits their needs and wants.

Real estate properties with room for improvement and additions are better valued.

Investment Potential

The value of a property is also influenced by the potential it presents to investors. Factors such as the rental income an investor can expect from a property and the capital growth they will enjoy when they later sell the property all play their part.

Ignoring any of the things we have mentioned will immediately result in a bad business move. For our readers that are looking to buy property, invest, or are real estate agents, keeping these factors in mind will help you make better decisions.

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