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légalités & lifestyle
What Affects the Price of a Property?
One of the signs that you’ve found the right house is that you make an immediate emotional connection, within minutes of walking through the front door, or sometimes even before you enter the house! This sudden realisation will probably mean you’re more willing to pay the asking price or even more, but who sets that asking price to begin with?
As in all aspects of economy, supply and demand have a direct impact. If more people want something, then the price will go up. So understanding prices is really a question of understanding what people want – or what most people want. In the case of properties, the value is a mix of factors that change all the time, here are the key ones:
How big is it?
Size is not always important, even if many people dream of living in a big house. But big sizes and a high number of rooms are not always a plus, in many cases useful space and layout might be worth more. Outdoor space is also relevant, especially here in Ibiza where we tend to live outdoors for most of the year. A property with a big garden will generally have a higher price than a property with only a terrace. The same is true of a swimming pool or other interesting feature. The wow factor can’t be underestimated.
Is it in good condition?
In this case, the key rule is, if the property is likely to require less investment in the future than the buyer will be happily paying more. If the property is in top shape and has been recently renovated, this adds to its value. Aesthetic factors can have a positive effect as buyers respond well to clean, tidy, welcoming houses that showcase the spaces.
Is location everything?
Most of the time we hear that location is key. But here in Ibiza, that’s not completely true as everyone has their own idea of the perfect location – a seaside home can appeal to someone, while a property in Ibiza town might be ideal for others but there are also people willing to pay a premium to live in the quiet countryside. Again, as long as these locations appeal to enough people, then prices will be higher. If you want to get an idea of what it’s like living here, read our previous blog “Properties and Lifestyle in Ibiza”.
What’s the best location?
Some locations have historically been in high demand and prices have reached stratospheric levels, but it’s important to remember that the appeal of any location can change, and this can have a significant effect on prices. At this time we can state that the North of the island is up-and-coming, which made raising the prices of luxury properties in this area. To find out more, read our previous blog: “Demand of Luxury Property in the North in Growing”.
What about me?
Despite the reality of prices being broadly based on the needs and wants of the many, your individual taste and requirements will ultimately define how you ‘value’ the property emotionally and how much you are prepared to pay in financial terms. Whether it’s worth paying extra for something other people want but you don’t is up to you.
In the end, the market is really an aggregate indication of how lots of individuals feel about a very complex set of characteristics, the relative values they place on them and how many elements a particular property offers.
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