---
title: "Factors affecting the value of property"
subject: "Construction Management"
chapter: 13
key: "semester_8/construction_management:factors-affecting-value"
source: https://www.bctengineer.com/q/semester_8/construction_management/factors-affecting-value
site: BCT Engineering
---

# Factors affecting the value of property

Construction Management · Chapter 13: Valuation

- Asked in: 2078 Chaitra, 2 marks; 2077 Chaitra, 2 marks; 2070 Magh, 3 marks (asked 3 times)
- Video: [Valuation of a Property / What is the purpose of Valuation / What factors affecting Valuation](https://www.youtube.com/watch?v=-BRwUs27ByY) — CIVIL ENGINEERING CHAPTERWISE
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/construction_management/factors-affecting-value
- Whole chapter: https://www.bctengineer.com/md/semester_8/construction_management/chapter-13

## Question

Explain the different factors (parameters) affecting the value of property.

## Short answer

Property value depends on location, demand-supply, utility, plot size/shape, physical features, building age/condition, income, legal restrictions, infrastructure, economic conditions, political/social factors, disaster risks, and amenities like parking.

## Answer

The value of a property is not fixed; it depends on many factors.

1. **Location:** nearness to the city centre, market, roads, schools, hospitals and public transport raises value; a remote area gives lower value.
2. **Demand and supply:** a high demand and a short supply of land or houses increases value.
3. **Utility and purpose:** the usefulness of the property, the type of use (residential, commercial or industrial) and permitted land use.
4. **Size, shape and orientation of the plot:** a regular shape and frontage on a main road have a higher value.
5. **Physical features:** soil, topography, drainage, flood risk, view and environment.
6. **Age, condition and life of the building:** the remaining life, quality of construction, maintenance and the depreciation.
7. **Income (rent):** the net income that the property gives.
8. **Legal factors:** ownership and title, tenancy, restrictions, building bye-laws, FAR, setbacks and taxes.
9. **Services and infrastructure:** water, electricity, sewage, road access, telephone and internet.
10. **Economic conditions:** inflation, interest rates, availability of loans, and the general economy.
11. **Political and social factors:** law and order, development plans, neighbourhood, and future planning.
12. **Disasters and risks:** earthquake, flood, landslide.
13. **Scarcity and fashion;** amenities such as parking and garden.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. How does location affect property value?
   A. Location has no effect
   B. Remote land is always costlier
   C. Only the building matters
   D. Nearness to city, roads, market and services raises value; remote areas lower it
   Answer: D. Accessibility and nearness to services raise value. (Key point: Location)

2. What increases the value of land?
   A. Low demand with large supply
   B. High demand with short supply
   C. Zero demand
   D. High supply only
   Answer: B. High demand and scarce supply increase value. (Key point: Demand and supply)

3. Which is a legal factor?
   A. View from the plot
   B. Soil type
   C. Fashion
   D. Title, tenancy, building bye-laws, FAR and setbacks
   Answer: D. Ownership, tenancy and bye-law restrictions affect value. (Key point: Legal factors)

## Related in Construction Management

- [Cost vs value; factors affecting valuation](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Acost-vs-value-factors) — Construction Management, chapter 13
- [Value of property and fair value numerical](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-property-numerical-2073) — Construction Management, chapter 13

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