Property price is perhaps the most important determinant of your real estate investment decision. After considering all the requirements and benefits of an apartment, if the price is not within your range, you probably would not purchase it. However, an important question remains, how would you know if the right value of the property. Sadly, as of now, there is no particular parameter for property pricing in Bangladesh, and we rely on several different factors to determine the price of apartments. These may vary based on location, property type or even sometimes the seller. While many factors affecting the property prices, we have listed down some of the elements that have a direct impact on them. Therefore, you will be able to take a better decision before you buying property next time.
Supply And Demand
One of the basic yet compelling factors affecting the property prices is the current demand and supply. As the demand increases, price of the property will adjust automatically to bring stability in the market. This concept of demand and supply of accommodation is widely visible in Bangladesh, especially in Dhaka. Since most of the developments of the country are concentrated around the capital, many people seek accomodation in Dhaka to find better opportunities. It is one of the reasons why property price in Dhaka is the highest in the country. Then again, the price of apartments in Dhaka differs from one location to another based on unique characteristics and amenities.
Market Interest Rate
The majority of home buyers rely on financial leverage and borrow a hefty sum of money. The market interest rate is the key that indicates how much money people would borrow from financial institutions. Low-interest rate means low cost for the borrowers, and therefore more people would apply for home loans. As home buyers have access to their required funds, demand for properties increase and so do the prices.
Similarly, lower interest rate is beneficial to the developers because they incur less interest expense. Therefore, they can reduce the property price as well. Balancing the availability of funds to general mass and supply of apartments, the property market adjusts the amount to create a stable situation.
Real estate market growth is also crucial in the pricing of the property. With more growth, comes more jobs, and with more jobs, comes a higher demand for property for people to live in. Moreover, when a particular sector starts growing in a specific area, it attracts lots of things with it like businesses and talent pools. Hence, the price of apartments tends to increase. For instance, take a look at Gulshan today. Many corporate HQ’s are now shifting here, and this is one of the contributing factors as to why property price in the area can rise over time.
Commuter and Transport Links
Area accessibility is also among the significant factors affecting the property prices. Everyone wishes for a hassle-free commute to their home. Also, proximity to commercial hubs such as Gulshan or Banani is also desired by many home buyers. Therefore, areas that are easily accessible and have an acceptable transportation standard tend to have higher prices than others.
Future prospects and developments also contribute to property pricing. Recently, the Bangladesh government has undertaken several commuter construction projects. One of the major projects is the Metro Rail in Dhaka City. If you have been following the trends, you can easily notice how the property prices in those areas are increasing.
Apartment Features and Benefits
Indeed, the property itself contributes in the pricing of real estate. Then again, it is very subjective as there is no limit to luxury. Some common attributes can be generalized such as floor layout, parking, open space, emergency facilities, and quality of the property, e.g. construction materials.
Here, the developer brand also plays a big role. The country’s most prominent and trusted developers can easily charge a premium on their apartments, and people are willing to pay the extra. Similarly, property type impacts the price too. For instance, condominium apartments benefits include an array of facilities within a gated community at an affordable price range. If these facilities were incorporated in a regular apartment building, surely the price would have been way higher.
Apart from all these, the necessities have a direct impact on the price of apartments e.g. safety and security educational etc. These are again subjective to personal needs. However, considering the factors mentioned above, property prices fluctuate the most. Therefore, before purchasing an apartment, know what you are paying for and if it is worth your investment. If you have any queries regarding these factors or would like to know more on this matter, let us know in the comments section below and we will get back to you.