An estimate of land value involves the assessment of various factors, precisely physical, social, economic, which have direct impact on the land in terms of investment or development purposes. Here is a quick look at some of the key factors that are considered while estimating the value of a land parcel for development or investment.
Valuation of land is impacted by the availability of the land parcels in the specific location. Land parcels in locations with developed social and physical infrastructure and proximity to industrial hubs witness higher demand considering the prospect of commercial and residential development. Also, established neighbourhoods of commercial and residential pockets tend to garner more interest from developers thus impacting land values.
Additionally, land parcels with a higher FSI/FAR command a higher value. Availability of the facilities such as shopping centres, medical facilities, school, parks and playgrounds etc vicinity add to it. Any land parcel located in neighbourhood with adequate social infrastructure will command a higher value as compared to an undeveloped or upcoming neighbourhood. Land parcels located in economic hubs or in proximity to locations with developed physical infrastructure such as roads, proximity to various modes of transport, also register a higher value expectation.
Proposed or under construction public infrastructure also impact the land value. Proposed investment by government or private enterprises for development of infrastructure like airport, road widening, industrial cluster also lead to higher expectation in value for land located in the vicinity of such projects. However, such expectation will not be sustainable in the long run unless there are no concrete steps taken towards the commencement of such projects.
The above-mentioned factors are some primary aspects to be considered while estimating the value of land. Although, they do not bring out an accurate value of the land however serve as a basic guideline in the assessment of the prevalent rates in the location.