(1) Movement in Populations
An increase in population may put greater presuureof demandon land property for both occupations and investments purpose. Land is not only a necessity for providing shelter, but is also the fundamental platform of all human activities. As more number of people arrive in an area, more the land needed to accommodate the various activities. The per capita allocation of space for various human needs reduces in an urban area as the population grows. This is very pronounced as the supply of land is fixed. As a result the gap between demand and supply widens resulting in price rises.
(2) Economic Activity
With a rise in economic activity such as industrial growth the needs of land for other purposes such as commercial centers, roads, house, hospitals, aerodromes etc grows. The demand of land for these services and facilities increase steadily. With economic prosperity general income of people rises and demands for individual facilities also increase. In short, the So economic activity pushes up demand for land property in every sphere.
(3) Improved Accessibility
With opening up of new communication facilities and transport routes more outlying districts gain advantage of accessibility to urban service center. This gives rise to a demand for residential land use in the outskirt areas and a demand for trade, commerce and service centers in the central areas.
The demand for investment in land property may rise due to inflation, as land is not only a factor of production but also can be advantageously utilized as a store of wealth. Any purchase of real property is an investment. Capital conscious investors prefer landed property as their channel for investment. This is particularly so as land property shows a steady and certain rate of appreciation in value Land is indestructible in character. For this reason land is regarded as an ideal medium for maintaining real value of money during inflationary times. In growth economies with considerable inflation there is a strong demand of land for investment amongst the business communities.
(5) Change in taste and social circumstances
A Change in social circumstances may trigger new set of demands for a particular type of land property. For example, increased trends for independent small family units in urban areas have given rise to large scale developments of small flat and flat-lets for upper middle class society.
Factors affecting supply of landed property
Let us now now examine the supply side situation which may influence value of land.
The following aspects are to be noted on the supply side.
- Limited supply of land for development and it cannot be increased.
- In the long run there is a limit upto which property supply could be augmented.
- Once property has been constructed and demands suddenly recedes away then supply cannot be reduced Property is a durable capital asset is consumed slowly over time.
- Supply of landed property is dependent upon availability of finance for property development.
- Due to unfavorable legislation property development may sometimes be unattractive to investors.
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