6 Factors that Affect Condo Pricing
Admittedly, the very first thing that comes to our mind when we talk about investing in a Bonifacio Global City condo is the PRICE. I know, you couldn’t agree more. As such, if we think that the price of the condo is expensive (READ: extremely expensive), we skip it and find another unit. However, if the condo is just right and is an affordable one, there is a possibility that we might purchase it. Generally speaking, it is one of the purchasing behaviors of the homebuyers – looking at the price tag first. But don’t you ever wonder why the prices of each condo unit are never the same?
In every real estate transaction, it is important for you to understand the factors that affect the pricing whether you are a homebuyer or a seller. This is also true when it comes to the prices of condos. If you are planning to invest, you cannot continue with the purchase without knowing the value of the condo unit. The transaction will always depend on your capability to pay for the unit itself as well as the associated costs of living in the condo building. If you invest in a condo unit beyond your financial capacity, it will definitely affect your entire financial status and for the longest period imaginable.
Although it is true that it is important to know the price first, it should not be the only thing you should take into consideration. Knowing the ups and downs of the price will help you make the right decision when it comes to investing in a condo unit. Moreover, this will guide you to implementing a much better real estate approach.
When the location of the condominium building is at the center of a business district and has a high rate of employment, tourism and retirement opportunities, this attracts more people to stay and purchase a property within the vicinity. The convenience and recreation and the opportunities do not just attract locals, but also people outside the country. There are even people who chose to migrate and live in a place where they know that can have all that they wanted.
With migration, the increasing number of homeowners affects the condo unit prices. The more people who choose to stay in one area, the higher the prices will be. Also, the more basic services and commercial establishments need to open. However, if there is a potential closure of an important industry due to environmental problems or any other factors, it will also affect the people living within the area such as in terms of employment. The real estate prices will go down.
Most of the real estate investors, if not all, usually lose confidence when they know that the property has a high vacancy rate. Of course, if there are no homebuyers who are interested in purchasing this property, there will be potential risks inherent to unsuccessful real estate investment. Moreover, the situation forces the seller to make the price of the condo unit lower than its usual market price.
On the other hand, if the price of the condo unit is an affordable one, this could attract first-time homebuyers and renters. This is also one way to encourage and stimulate the activities within the property investment industry.
Location and image
When it comes to living a good lifestyle, homebuyers usually have this kind of stereotype that a highly and well-known condo is a desirable place to live. This might be true since there are lots of condo owners in one particular area. There are some condo buildings which are not surrounded by skyscrapers and other prominent commercial establishments. However, for as long as the condo is accessible and safe enough for the homeowners, living in that particular property is not an issue.
When people know that the condo has a great and desirable location, more and more homebuyers will be interested in purchasing a condo unit within the area. Of course, if home ownership is increasing, the price of the condo unit will definitely go up as well.
Investing in a property does not end up in a ready-for-occupancy condo units. There are also homebuyers who prefer investing in a pre-selling property. Basically, pre-selling condo units are being sold before its completion, during its construction, or while it is still in the planning stages. This gives homebuyers the opportunity to have time to prepare the necessary papers and budget for the condo unit purchase.
However, if there is a shortage of land or a property that is intended for the development of the condos or there is a municipal zoning restriction, there will be a greater chance that the price of the condo unit will be high. On the other hand, if there are too many condo units that are up for selling, the price of the condo will definitely go down. Again, let’s go back to the supply and demand principle. It’s very helpful.
When a particular condo property is supported by a political party, there will be a lot of possible situations that might occur in the long run. For instance, there will be local government policies addressing the support of its development and advancement to attract more condo buyers. Of course, one way or another, there will always be money involved when a few politicians are involved in making decisions. Home sellers and homebuyers alike have no control over the effects of their involvement on the situation.
Naturally, if the reputation of a particular condo property is not that good more specifically when the situation reaches the public scrutiny, there will be lesser people who will be interested in the purchase. With that, there will also be a greater chance that the price of the property will go down.
Condos are not always in demand. There will be certain times of the year that are considered as slow months for residential property sales. Buying a property in this particular season has an impact to homebuyers and home sellers. Fortunately, if you plan to purchase a condo unit during the off-peak months, there is a bigger chance that the prices are lower than its current market value.
Be reminded though that home sellers are also aware of this. So, they delay selling their houses. Those units that are for sale during the slow months are typically the older units. Thus, you also need to be keen in choosing the right condo that fits your lifestyle.
When it comes to real estate transactions, it is advisable to know what factors and processes are involved. Even if you hire a real estate broker, knowing the ins and outs of the transactions is a plus factor. More importantly, you can improve your knowledge base and there will be no chance of you being scammed.