by | Jul 12, 2020

Reading Time: 4 minutes

We have seen exponential growth in property prices for the last two decades. With people moving to Indore from all around the state to work and settle land scarcity and space crunch are still far from being a trend in Indore, as it is still plentiful with land available for development. It is not the scarcity but the human tendency to stay close to one another that leads to value appreciation of land in certain parts of the country. This decisive factor is behind every popular method adopted to arrive at a land valuation in India.

There can be various methods for assessing the value of land, let’s discuss a few of them and understand what factors affect the monetary value of a property.

Comparative Market analysis

This valuation method works for you if you are living in an active market where a comparable data exists, to make calculations. Here, you simply gauge the value of your property from a recent comparable sale instance in your locality. Majorly following are the factors that will affect the value of your land in comparison to others nearby:

Location: Even within inside a colony the location will have an impact on property’s worth. For example, a property that is close to a highway will be marked at a lower price, because of the additional disturbance that the residents might have to face due to heavy moving traffic on the highway. Or, a garden facing plot will fetch a higher price than a plot surrounded by other houses.

Shape: According to Vastu, flats with irregular sizes hamper the owner’s personal, as well as professional growth; and with Vastu playing a pivotal role in house planning, people are most likely to go past any offer for a property with an irregular shape.

Size: Obviously the size would command the price of your property.

Level: Sometimes based on the area of the city you live; the level of your flat decides the price of your property. For example, in Mumbai, upper floor flats are priced higher because most people do not opt for ground floor flats due to the recurring floods during monsoons. However, in Indore, the opposite is true where the ground floor homes command a premium.

Access: the frontage, a corner plot, easy entry points would value at a higher price as compared to others.

Legal issues: Suppose your property is jointly owned by your sibling who is not willing to sell his share in the property. Such a problem may not only stall the sale but also result in value depreciation.

Development Method of Valuation

This method of Valuation is used for the properties which are in the underdeveloped stage or partly developed and partly underdeveloped stage. If a large place of land is required to be divided into plots after providing for roads, parks, etc, this method of valuation is to be adopted. In such cases, the probable selling price of the divided plots, the area required for roads, parks, etc, and other expenditures for development should be known. For example, the property market in Bada Bangarda, Limboda, Tigaria Badshah, Bhawrasala, etc. have seen exponential growth in demand and thus increasing prices for property due to the development of the Super Corridor.

The development method of valuation is also used for properties or buildings which are required to be renovated by making alterations, additions, improvements, etc. The value is calculated based on the anticipated net income generated from the building after renovation work is complete.

Belting Method of Land Valuation

The value of a plot of land has a great bearing on its road frontage. Frontage land has a greater value than back land. So, in order to find out a more realistic value of the land, the entire plot is divided into a number of convenient strips by lines parallel to the centerline of the road. Each such strip of land is known as a belt. Normally the plot of land is divided into three belts. The depth of the second belt is taken as 1.5 times that of the front belt and the depth of the third belt at 1.5 times the depth of the second belt or depth remaining after the second belt is considered as the depth of the third belt. The value of the front belt is maximum. The second belt is valued at a two-third rate of the first belt and the third belt is valued at half the rate of the first belt. Ascertaining rate per sqm. of land for the first belt the value of each belt is worked out. Multiply the area of each belt by the respective related rate per unit area. After summing up the value of each belt the value of the entire plot of land can be known.

The guidance value method of property valuation

For some of us, the job becomes easy since authorities have carried out the onerous task and have allocated a specific guidance value — also known as circle rate, ready reckoner rate, etc. — to land. This is done by states in order to levy stamp duty and registration charges on the transfer of properties. Gurugram’s district administration, for example, recently announced a hike in the circle rate that is likely to make the purchase of plot-based properties costlier. However, the government-specified rates could be higher and lower than the prevalent market value of the property. In case you are planning to sell your plot/flat, find out about the prevalent market rate.


These property valuation methods are the most commonly used ones to evaluate real estate property. Choosing the best method out of them depends on the type and use of the property and the availability of information.


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