The rates in one area of the city are soaring and at another, they are plummeting. The macroeconomic factors that determine the market are same for both these areas; then why the difference?
Example; the pricing at Kukatpally (Hyderabad) is lower than the neighbouring Hitech City.
The real estate prices in Tellapur are soaring and the neighbouring BHEL are not as high.
It could be because of two reasons:
If there are not too many housing projects then due to the supply bottlenecks, the pricing in that area could be high. On the other hand, if there are too many projects mushrooming in some part of the city, due to oversupply of homes/choices there, there could be a price reduction.
If there is proximity to large developments, the project picks value, and as the distance increases, the value drops.
Certain neighborhoods retain their cache due to their intrinsic value, like best constructions, good housing society, self-sufficient in terms of market, schools, hospitals, etc. Ex: D.D. Colony (Hyderabad)
Apart from these each project has an intrinsic value of its own; the builder, the quality of construction, the amenities provided, the scope for appreciation etc.
Macroeconomic factors like high population increase thus leading to increase in population in prime household formation age, significant increase in the per capita income, interest rates, inflation, market sentiment, stable jobs, stable government, favorable policies etc all contribute to pricing, demand supply in realty but in the pricing and demand, the biggest influence is local market.
