The Stigma Effect on Property Value: A Study of 'Value Depreciation' and its Distribution in India
NICMAR Journal of Construction Management and Research, Volume XXXII, No. 2. pp 42-52, (October – December 2017
14 Pages Posted: 18 Oct 2018
Date Written: December 4, 2017
Valuation of real properties is an important process that aids the real estate/property market transactions and agents. Valuation of properties is generally governed by physical, economic and financial factors concerning the property, market conditions and market players. However, other factors like information, belief, trust and other psychological and behavioural factors also affect the value of property to a good extent, but this aspect is not studied much. ‘Stigma’ associated with the property is one such psycho-behavioural factor attached to property that affects its value. Varieties of ‘stigma’ can exist upon a property depending upon the situation. This paper reports an assessment of the effect of ‘stigma’ on property value in terms of ‘depreciation’ on the value of comparable properties. Based on the primary data collected from various parts of the country (all observations from Indian cities), the paper analyses the distribution of the ‘stigma effect on property value depreciation’ across various regions of India i.e., north, south, east west and central. Subsequently, the paper also analyses on which aspect of the property value can the stigma impact can be seen most i.e., income yield (Y) or capital value (C). The distribution of ‘stigma effect’ across the regions is thus explained through the Y-C matrix derived for the above regions.
Keywords: Real Properties, Property Value, Stigma, Valuation, Y-C Matrix
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