Which factors affect the price of properties?

How the final price of properties is formed is a topic that interests a large part of society. In the market economy in which we live, there is an unwritten law – the greater the demand, the greater the supply. This rule is fundamental in shaping the prices of residential properties, but it is not the only leading factor. In this article, we will examine the main drivers for this valuation.

  1. Location

The factor with the greatest weight is undoubtedly where exactly a property is located – between 60% and 80% of a property’s value is determined by its location. Naturally, the level of local schools and the number of kindergartens and nurseries in the area, the job opportunities, and whether it is close to shops and public transport stops are of great significance. In short, the more conveniences, the higher the property price.

  1. Type of construction

The type and quality of construction, as well as the materials used in finishing works, significantly affect the determination of a property’s value. Another key factor is when a building was constructed. However, if the construction is of high quality, such as brick, even if it is old, the price will not decrease significantly because it is durable over time and reliable. On the other hand, in older buildings, the water supply, pipes, or roof are more likely to be problematic and require repairs, which is also a factor when choosing between new or old construction.

  1. Size and condition of the property

Everyone dreams of a large and spacious home, and without a doubt, the more area a home has, the higher its price will be. In addition, apartment prices are usually based on the built-up area in square meters.

While owners cannot increase or decrease the size of the property, they do play a role in the condition of the apartment, which is also not insignificant. Have changes been made to it, when was it last renovated and with what materials, is the property well-maintained – all these factors can lower or raise its value.

  1. Economic factors

Economic changes undoubtedly have a huge impact on the real estate market. In slowly developing economies, the market unfolds more difficultly, and people are less likely to invest in properties, while a more developed economy and dynamic conditions that raise the standard of living and opportunities for realization have a positive impact on the property market.

On a global scale, something that can also be a key factor in the field is the price ratio between the euro and the lev. Since Bulgaria is in the EU, apartment prices are most often determined in euros; therefore, unstable and sharp increases or decreases in the exchange rate lead to consequences in investments.

These are the main factors to consider when forming the price of a particular property, but by no means are they all. Each property has its specific characteristics, pros, and cons, and there is no established model for determining its price – an individual and most importantly – professional approach is needed.

Available properties