There are many factors in play when it comes to investing in a plot, and even a comprehensive list of factors affecting plot prices in Pakistan can only include the most important ones. Factors such as the availability of renowned schools nearby, commercial markets, and preventative facilities – to put it simply, even something that seems minute can have a surprising effect on the asking price.

Feel confused? Don’t be. We’ve done the legwork for you and assorted a comprehensive list of factors affecting land value in Pakistan, so you can make a financially sound decision. These include:

Topography and Location
Floor Space Ratio (FAR)
Future Use of The Land
Buyer’s Market – Local Real Estate Market
Nearby Amenities – Mandatory and Luxurious Utilities
The geographical location of the land is, hands down, the most pronounced key factor that influences a plot’s value not just in Pakistan but across the world. It doesn’t necessarily have to be about the developmental work in the area. So, how to determine whether the location is perfect for buying a land or not? To understand the term location and topography better, let’s break it down into three determinants: physical features, type of the region, and nature of the land.

To begin with, when it is about physical features, every location is unique. For instance, buying a land in a crowded city on a corner location usually requires a premium as compared to other locations. Likewise, purchasing a same-sized plot in the outskirts of a city rather than in the heart of the concrete jungle will obviously require a lesser amount than the plot located in the city.

Similarly, the nature of the land also plays a crucial role in determining the plot’s value after physical features and pin-location – which implies that buying a residential plot will cost you less than buying a commercial plot – considering the future use of the land. For instance, if you are investing in a plot that is restricted for any commercial purpose, then there’s no way that a commercial plaza can be built on it and can be used for additional revenue generation. The most you can do is offer a portion of the property on rent or sell the same or the entire property for some profit.

There are certain factors about topography that need to be taken care of as well, such as the average temperature of the region, greenery, and the presence of groundwater.

Floor area ratio (FAR), or also known as floor space index (FSI), is among the key factors that influence a property’s price. Here’s a simple formula to help you get better acquainted with FSI/FAR. The size of the land and the width of the connected road reckons floor area ratio – which simply means how much area in a plot can be used for construction and development, critically impacting a plot’s value. It goes without saying that if the authorities plan to increase the space that can be used for construction, then it would positively impact and boost the plot’s market price.

At times, two plots can seem indistinguishable yet possess extremely different values. Imagine the triumph of buying the land of your dreams, situated far off from the city and perfectly suited for agriculture. Now, imagine the ordeal of selling the same parcel of land when suddenly urbanisation takes over the region and potential buyers are only looking for residential or commercial plots to turn them into high-rises.

Although the fertile land has the potential to fetch more value than a plot with no greenery and horticultural features at all, the plots restricted for agriculture cannot be utilised for residence. Often authorities place limitations on the kind of construction that can be done on the plot. Hence, a plot’s value is entirely dependent on the permitted use of the land. Finding the best possible use for your land is a crucial step towards increasing its future value. This is why it is always recommended to consult real estate experts before investing in a plot.

Surveying real estate market gives a better insight into what buyers and investors are interested in. It also helps property seekers understand the factors that affect the property market and the available opportunities for securing investment. Factors that profoundly affect real estate drifts can include government policies, the economic situation of the state, and demographics – a study into the population.

The performance of the market can also be judged by the simple theory of economics: supply and demand – the number of plots being sold and the demand for them during a particular period. If the demand outweighs the supply, then the prices are more likely to see a hike and vice versa. Besides these two extremes, there are many interesting variations regularly witnessed in the real estate market.

Nearby amenities are often underrated when discussing the key factors influencing land value, but it doesn’t take away from the fact that humans cannot survive without necessary facilities such as public transport, schools, hospitals, and grocery markets. It is essential to sort your priorities, for instance, if a residential plot is readily available with water, electricity, and gas connections but far from public bus stops and commercial zones, then such property will fetch lesser profit as compared to investing in a plot with facilities located at reasonable distances.

It is although hard to find a perfect plot, let Bin Sadiq Real Estate Area Guides help you find the area and plot of your choice detailing the amenities such as:

Detailed overview of close by parks and whether they feature jogging tracks or not
Insight into nearby commercial and grocery markets – with specific details of km and average commute time
Academic institutions, gyms and fitness centres, and preventative facilities
Recreational hubs including malls and restaurants
Proximity to the above-mentioned facilities coupled with the presence of main roads, upcoming and nearby developmental work, and important landmarks leads to a better appreciation of a plot – for instance, residential plots located within extensive industrial activities such as markets or factories command lower prices than commercial plots.