As a buyer, seller, or investor in today's real estate market, there's one thing that you need to understand. The market price of the property that you are trying to buy, sell, or invest in, does not solely depend on location and size. The infrastructure that comes along with the property in question also plays a substantial part in determining its value in the market. Factors like accessibility, the surrounding neighborhood, security, and infrastructure (social and civic) are some of the things that hold weight when determining the value of property.
What Is Infrastructure?
When one talks about the infrastructure of a particular property, that would include things like availability of proper water and electricity, an access road, a garage, a properly fitted kitchen and bathroom, efficient waste disposal facility, proper drainage system, security, and anti-theft measures. Since the factors stated above can have a huge impact on raising or lowering the owner's standard of living and that of the general area, they must be taken into serious consideration while appraising the value of any property.
The facilities stated above can be categorized into two: external, and internal infrastructure. Studies show that these two categories combined, affect about 31% of a property's determined value, apart from the economic infrastructure, which affects a major portion of the end value. So one can be pretty sure that the unavailability of such infrastructure can reduce the property's value to a considerable extent.
Its Effect On Property Rates:
Real estate has no value if it has no utility. A piece of land holds importance so long as it sustains man's needs.
1. Good infrastructure leads to a better quality of life in the area, which positively affects the property rates.An example of this is the Lekki Free trade zone,the airport and deep sea port being developed in Ibeju Lekki and Eleko Lagos
2. It also increases the multi-factor productivity (The effects on output value not directly caused by the input), and that again has an effect on the property value.
3. The level of infrastructure in and around the property like malls, complexes, and schools, also cause an increase in the said property rate, as they raise the standard of living in the vicinity.
4. The availability of good transport infrastructure is also a key factor in determining a property's market value.
Thus, in conclusion, one can clearly see that all the above studies and observations point to the fact that any piece of property, be it a piece of vacant land or a mansion, will have considerably reduced market value if it fails to come with the required basic internal and external infrastructure mentioned above
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