What factors influence the price of properties?

The price of a property is not a random value, nor is it determined solely by the seller's wishes. It is the result of a combination of multiple factors - economic, market, locational and purely individual characteristics of the property itself. Understanding these factors is key for both buyers and sellers, because it helps to have more realistic expectations and more successful transactions.

In this analysis, we examine the main factors that shape the price of properties, based on both our many years of experience and exclusive data from our partners from the Realistimo property portal. Vivahome® is an active agency in Realistimo.

Location and environment - the basis of value

Location is among the strongest factors that influence the price of a property. The same apartment in terms of square footage and layout can have a radically different price depending on the neighborhood, city or even the specific street. Proximity to central areas, convenient access to public transport, the presence of schools, kindergartens, hospitals, parks and commercial establishments increase the attractiveness of a given area.

The overall urban environment is no less important - cleanliness, greenery, noise levels, security and future development potential. Areas with planned infrastructure projects, new road links or metros often see price increases even before their implementation, as buyers calculate future value.

Economic environment and financial accessibility

Macroeconomic conditions have a strong impact on the property market. Income levels, inflation, unemployment and general economic stability directly affect the purchasing power of households. When the economy grows and incomes increase, more people can afford to buy a home, which leads to increased demand and higher prices.

A particularly important factor is mortgage interest rates. With low interest rates, loans become more affordable, monthly payments decrease and the market becomes more active. When interest rates rise, some buyers postpone their decision or turn to smaller and more affordable properties, which can cool the market.

Market supply and demand

The price of properties is also formed by the classic market balance between supply and demand. In periods when demand significantly exceeds available properties, prices inevitably rise. This is often observed in large cities, where the influx of population, limited land for construction and the delay of new projects create a shortage.

The opposite situation - when supply is greater than demand, can lead to stagnation or even price adjustments. This happens during economic uncertainty or when a mass launch of new projects occurs in a short period.

Characteristics of the property itself

Internal factors related to the property itself also play a significant role. The type of property - apartment, house, studio or maisonette, as well as its area and functional distribution are among the main internal factors. Well-organized space, correct proportions and the presence of sufficient natural light make the property more desirable.

The condition of the home is another key element. New construction or major renovations are usually valued higher than those that require major renovations. The quality of materials used, insulation, installations and energy efficiency are increasingly decisive for buyers, especially in the context of rising maintenance and energy costs.

The number of floors, exposure, views, the presence of a lift, garage or parking space can also significantly affect the final price.

Legal and regulatory framework

Legislation and regulations in construction and property also have an impact on prices. Energy efficiency requirements, building restrictions, urban planning and administrative procedures affect construction costs and market supply.

Tax policy and local taxes can make an area more or less attractive for purchase and investment, which indirectly affects prices.

Demographic and social trends

Demographic processes are a long-term factor in the property market. Migration to large cities, changes in household structure and the needs of different generations influence the demand for certain types of properties. For example, the growing number of young families increases interest in two- and three-bedroom apartments, while investors often look for smaller properties with good rental yields.

Social attitudes and lifestyle also play a role - the demand for quieter neighborhoods, green spaces or properties with the possibility of remote working changes price levels in different areas.

Market Psychology and Expectations

Last but not least, prices are also influenced by the expectations of market participants. News about future developments, infrastructure projects or a general feeling of a "rising market" can lead to increased demand and price growth even without immediate economic changes. Sometimes it is this psychology that accelerates the processes of appreciation or cooling of the market.

In this complex combination of factors, the accurate determination of the price of the property is key to a successful transaction. Our agency can help you with a realistic market assessment that takes into account both external conditions and current demand, as well as all individual characteristics of the property. This avoids both overvaluation, which often leads to a long stay on the market, and undervaluation, which deprives the owner of the real value of the property. If you want your property to be positioned correctly in property portals and the transaction to take place within the real market framework, contact us - we will assist you at every step of the process.