Overview

The market value of landis the value of a land, including its value plus any updation made to it. One should not mistake it for site value, which is the genuine value of the land and does not have any mortgages, leases or anything else. Land value increases when demand for property exceeds the supply of the available land. It can be determined by real estate appraisals which is done by third parties. The assessment of an appraiser is important to lender’s decision to finance a buyer. We at Your Property Doctorcan help you evaluate the market value of your land.

Key Factors that Determine the Market Value of Land

Land valuation factorsinclude the following:

Location: Pieces ofland in posh localities are costlier due to better amenities. The value of land also depend on safety, and proximity to public transportation, commercial areas, recreational facilities and educational institutions. If you are interested in purchasing land, you must carefully assess the location to take a smart decision in the dynamic real estate market.

Infrastructure: There is infrastructure impact on land value.Pieces of land located near highways and roads have higher prices. Connectivity to railway stations, bus stops, metro stations airports and other prominent landmarks also increases the value of land. The convenience of commuting to essential landmarks also play a major role in increasing the prices of pieces of land.  

Economic Factors: The areas of the city that boast of robust industries, multinational companies and educational institutions, and provide diverse employment opportunities have greater demand for higher prices of land. So, economic factors in land valuation play a major.  

Regulations and Zoning Laws: Pieces of land that are in compliance with regulations and zoning laws, enforced by local authorities have higher prices than residential plots. Besides zoning law, government initiatives, such as industrial corridors or new highways, also increase the prices of land.  

Market Demand and Supply: The areas that have higher demand for housing due to migration or population growth have higher land prices. Limited availability of land in specific areas can also increase the land prices.  

Utilitarian factors: Availability of electricity supply, water supply, proper sewage systems, etc., increase the market value of land.In addition, pieces of land located in areas that have excellent utility services and infrastructure have higher market value of the property.  

How to Calculate Market Value of Land?

There are various methods to calculate the market value of land. Some of them include the following:

Guidance Value Method: This is a minimum value of land, calculated by the government. Under this method, the market value of land is calculated after reviewing the guidance value.  

Development Method: In this method, the price of the land is calculated after considering the scope of development of the area. This helps in making a better buying decision.  

Comparative Property Valuation: In this method, the value of the similar property in the same locality is calculated. There can be variations in the property price on the basis of direction, size, interiors and legal issues.  

Land and Building Method: Under this method, the value of land and building is calculated separately. Then, these two values are added to calculate the land value. Other factors are also considered.