Real estate business has always remained profitable in every era in most of cases except in the exceptional times when the value of the property goes down. The property file rates are so volatile and can be changed any time. The property rates change due to the environmental and societal factors that lead to the changing in price of the land. Every area has different property value and volatile and subject to change anytime and that changing may lead to profit or loss of the owner of the property. The demand of the property also turns out to be the reason for the price fluctuation.  The reason may differ in every society and the increased rate is always much greater whether in the private scheme or being developed under the government. The top housing societies tend to increase at the higher rate in a short time as the demand of the property in such areas increases. It is thought that the land costs are more volatile than house prices. There has always been a fluctuation in the price of file properties. There are many explanations but we will discuss some.

Although depending on the type of property, there are different reasons for the change in its value but generally speaking, some features that contribute to the change in its value include people’s perspective, the financial situation along with the economic, social and political situation. Sometimes the property faces peak, and sometimes trough.

Following are the few factors that become the reason of the property rate fluctuation

Property Demand

A higher number of people shifting from small towns and villages to the major cities become one of the reasons of the property rate being volatile. Believing in the fact, that with the continuous increase of demand of anything makes its price high and vice versa. Here the principle of demand and supply works. Thus the increasing population of a city is another reason of the rise in the property rates. When the supply of the property file is inadequate as compared to its demand, the result is its rising prices. Similarly, where property is abundant as compared to the number of buyers, the prices may come down. The property file rates are always in the state of change. The value and rate of a property depends on its future uses. The more useful it would be in future, the higher will be its prices and vice versa.

Law and Order

Law and order of a city play an important part in the every situation of especially while dealing in the property. Violence, target killing, theft in a particular area make people shift to another place where they can have safe environment this makes the property of that area decrease in the value but on the other hand the secure and the safe place where people prefer to purchase their home and business the property price and value increase with the passage of time.

Interest Rates 

The changes in the rate of interest affect the cost of property. When the rate of interest increases, the price of obtaining mortgage also increases. In this way the demand is lowered then the cost of real estate also decreases. In the same way when the rate of interest decreases, the mp0rtgage price increases, the demand also increases and then the price of the property increases.

The Economy

Another important reason why the property file value changes any time is that its value depends on the overall condition of the economy. The health and condition of the economy depends on the economic indicators for example the GDP, production, employment data, the cost of goods, etc. In other terms we can say that, when the economy is sluggish, the property value also becomes sluggish. Some specific type of properties effects greatly by the state of the economy.

Government Subsidies or Policies

Legislation also affects the value of property, its demand and supply. Government policies and subsidies can boost the value of the real estate.

Business Oriented Place

The area which fulfills the business requirements and people have the attraction to go and shop in the particular shopping area, the business oriented mind plans to build the shopping malls and plazas which in the long term increases the property value of the area.

Availability of Resources

The demand of any area depends on the conditions of water supply, gas and electricity for the residents. Where these basic necessities of life are shorter, then the property value will face fall. Water is the main and the basic need of living and thus the area which face the water shortage automatically lose its value.   The resources play an important part in the value of a land or a property.

Inflation and Rise in Prices

With the inflation prevailing in any country subject to rise in the price of every item in the market and naturally lead to the increased price and interest rate of the real estate. Things are correlated with each other which results in the price change in overall items i.e. with the increase price of fuel and power energy makes every item expensive and thus as a result the effects the price of the property and real estate.  When there is inflation, the people are discouraged to buy property and the number of buyers decrease which results in its lower price. The real estate is linked with many important factors and a change in any one of these factors will ring a significant change in the price of the file property.

Change in prices and volatility of the real estate business may due to different reasons and causes and they vary in each country depending on the situation and the environmental factors.  But still we have discussed above some of the important reasons that make the prices of the property go up and down. Based on these factors, the investors and buyers make their decision for buying the file properties.