Factors affecting Land Value

Posted on: August 1, 2016
  1. Physical attributes:

These include quality of location, topography, climate, availability of water, sewer lines, etc.

  1. Accessibility to economic activities:

The more easily there is accessibility to economic activity, the more is the value of the land. For example, most of the metropolitan cities have the maximum land values at the center, or at the central business district of the city. This is because of the nearness to the economic activities and work place.

  1. Neighborhood amenities:

The value of land is also affected by the availability of the facilities such as shopping areas, medical facilities, school, parks& playgrounds, and other basic need of the humans.

  1. Present and future land use:

The value of the land is also determined by the land use permitted in the land premises. For example, if we compare the values of two lands of same prices and same location but the land use permitted in the lands are different, one is commercial and one is residential. In such case the value of the land with the land use which has more rate of return over a period of time will be valued more.

  1. Demand and Supply Function:

With the major demographic changes in the cities with time, the need for land also increases with the same factor, with the increase in population there is increase in economic and other activities. This directly increases the demand in the of the land components. Anticipation of high yields may also induce false scarcity of land; hence the location advantages of the properties at any time within the urban boundaries and hence causes economic values of land to be increased. For any site there are certain points of transition in use, closely related to the infrastructure and services, where jump in property value are likely to happen.

  1. Location and Transport Linkages:

The property located in the area of high level of infrastructure facilities or the one located in or adjacent to the area of economical intensive activities such as markets or industries have higher values. Transport linkages are also important since they govern the mobility & ease of movement to and from the area. Clearly defined hierarchy of roads, efficient public transportation and lack of congestion are some of the desired transportation attribute of any area. Residential land values are also observed to be in direct proportion to the hierarchical order of the adjacent road.

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