What determines property prices?

What determines property prices? Housing is a basic need, and most people want to live in their dream home. Therefore, property is an emotional asset class. There are three main factors which drive market demand and therefore prices: 1.   Economic Activity: People move to cities where they can access job opportunities and earn good money. 2.     Human Interest: What can I do in this suburb on the weekend? 3.     Human Behaviour: What will people think of me, if I live here?

Owner-occupiers will pay a premium (if they can afford to), to get what they want – the water views, the proximity to work, the art deco features, the status of the location, lifestyle conveniences – restaurants, cafes, recreation parks etc.

These lifestyle drivers are the direct cause of some markets outperforming others. As a result, market growth has become more differential, in that, some localities perform beautifully and others stagnate or decline.

Our job at Deluxe Residences is to get behind that and study the human psychology of preference. No longer can you simply put your name on a title and wait for time to do its work.  You have to be more proactive and make better choices.

Location, location The location has a huge impact on a property's price growth potential. The only thing you cannot change about a property is its location. As a good rule of thumb, when it comes to price growth the suburb does 80% of the heavy lifting, and the property itself does the remaining 20%. Of course, we all aim to get both the location and the property right ever time. Example of such locations are Victoria Island, Banana Island, Old Ikoyi, Oniru, Lekki and GRA Ikeja etc

Yet fundamentally, an 'average' property in a great location is preferable to a great property in an average location. But a word of caution here – if you buy the wrong property, you will undo all the good work you've done in choosing the right location. MOST investors and buyers get this wrong and look at the property first before the area or location.

You should consider the characteristics or features of a property you wish to invest in or buy in the following order: 1.     State (e.g. Lagos, Abuja & Port Harcourt) 2.     Suburb (ideally within 10-12km of a capital city) 3.     Street (position and performance) 4.     Property (detailed analysis) 5.     Due Diligence (building inspection, title type) 6.     Negotiation

Property Type Once you have determined the right location, the property type comes next. While houses, townhouses and Apartments units can all make good investments, it's important you know which property type is right for you and your precious family and in case of investment, you must know what type of property your ideal occupiers want.

LET'S TALK TUNDE OLATUNNJI  RE Investment Adviser &  Intelligence Manager +234 90 8199 9908 Or email: tunde.olatunji@deluxeresidences.net DELUXE RESIDENCES LIMITED Plot 30, Oladimeji Alo Street, Lekki Phase 1, Lagos  www.deluxeresidences.net