Skip to 0 minutes and 6 secondsLast week, the first question explored was whether house prices always rise. Unfortunately, they may not always rise. And in some countries, they might even go down. We spoke about the impact inflation has and that nominal price increases are reduced by inflation, to come up with real price increases. How is your professional glossary coming along? Have you been able to add more terminology to your list? Did you learn anything new about the profession when you listened to Rupert Grayston? Then we briefly looked at the effect of interest rates and how paying interest has an effect on overall wealth gains. This week we explore the land component of property and what characteristics ought to be considered when valuing a property.
Skip to 0 minutes and 55 secondsSome of the factors that might influence the value of land
Skip to 0 minutes and 58 secondsenormously include: zoning regulations, land size, demographics, proximity to schools, proximity to shops, proximity to transport, slope, soil classification, state and federal legislation and regulations including land tax, first home owner's grant, and finally, easements created by statutory authorities. Some of these, like zoning restrictions, can affect land prices enormously in either direction depending on the benefit or otherwise of the zoning. And it is very likely that if these elements influence land values, they will affect property values since land is the basic resource.
Starting to answer the big question
A number of contextual factors influence the value of land, which in turn, influences the value of property.
The big question of what gives property its value is a complex question. We started looking at the some contextual factors that influence the value of land. However, estimating future value of land requires a critical consideration of many more factors that we will examine in later courses.
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