This might come as a shock to you. But it’s a fact. The value of property does fall (contrary to the belief held by some). Knowing what factors determine the price of land and buildings over time will help you make your property acquisition decision wisely, and avoid making a loss in real terms.
Here are some things to examine when choosing the property you want to buy, or keep.
Price changes for similar goods tend to move in the same direction, and this is the case with property. We are often able to make general assumptions about possible changes in the value of property given the knowledge we have of how prices have changed in the past. For example, we could say that given the rate of increase in the price of lands in the Ibeju-Lekki district of Lagos, property value in that area is likely to rise further.
Proximity to Economic Activities
Cities with a considerable degree of commercial activity- Lagos, Abuja, Port Harcourt, Kano, e.t.c. –tend to have higher property prices than would be encountered in the rural and semi-urban areas of the country. And this is for obvious reasons. In these centres, demand for land and buildings usually outstrips supply, because individuals who work in or around the business districts hunt for accommodation located close to their workplaces. The closer the houses are to these areas, the higher the cost of accommodation (and therefore, lands and buildings) will be.
Accessibility is always a factor to consider when siting a business, or choosing a place to call home. If the transport linkage to your plot of land is poor or non-existent, you won’t have millions of people falling over each other to buy it. The result? You will have to offer it for less, if you are serious about selling it.
The State of Facilities and Maintenance
Only in the odd instance do ruined concrete jungles with buildings in various states of disrepair attract the interest of large numbers of intending property owners. If maintenance isn’t on the priority list of old neighborhoods, the value of land and houses located within them will fall, along with their roofs and window panes. Impassable roads and the absence of water supply are bad for the property business too. On the other hand, renovated houses will sell for more, and attract more prospective buyers (if the renovation work is up to scratch, of course).