The Correlation Between Architecture and Real Estate Market Values

Fousiya Zaker F

Architectural design is important for today’s buyers. It is seen as an expression of personality, spirituality and lifestyle. Good architecture has a significant impact on real estate market value.

Although hiring architects and architectural designing are often considered luxuries, maximising your budget on them can fetch you better earnings in the long term.

Choosing a building style that suits you or your potential buyers will increase the value of the property. Alterations can be made to existing buildings to fit the architectural standards that the buyers demand to boost selling prices.

Although, it is not just the physical design of the specific property that is important, but also the built environment. It is a man-made environment within which all human activities take place on a daily basis, including living, working and recreation.

The architecture and real estate sectors together are responsible for building structures that would benefit the end-user.

Architectural Values of a Building

Architecture plays a role at the macro level of a city – urban planning and urban design, landscape architecture etc., as well as at the micro level, that is, construction details of a building. Architecture exists in different forms:

  1. As physical, tangible structures. It is easy to determine a property’s value based on its physical features, materials used and maintenance requirements.
  2. As art, style or design, which is intangible or abstract. The value of a property is difficult to be determined on this basis because it is heavily dependent on the culture, tradition, aesthetics and lifestyle of the people residing in the place.
  3. As a part of the ecosystem. The construction sector is one that is most probably going to last forever. Public buildings, houses, road networks etc. are parts of the basic necessities for a properly functioning society. The way of space utilisation of a city impacts its economy and resource values greatly.

The different architectural factors on which the real estate market value of a property depends are

1. Aesthetic Value

Architecture is a form of art and art is an expression. A buyer conscious of design would be looking for a property that reflects his personality and style. 

2. Structural, Functional and Material Value

A building that has structural stability and sustainability, serves its function efficiently and uses good, cost-effective materials will automatically have a strong market value.

3. Social Design Value

A structure not only serves the needs of the owner but also the surrounding population. Buildings and bridges hold the beauty and strength of a city. The rise of modern and contemporary structures are examples of designing a building to fit the emerging design standards of the people.

4. Traditional Design Value

Some buyers look to preserve culture and tradition through their properties. Traditional designs have their own enthusiasts and this makes them valuable.

5. Cost-Effectiveness

A well-designed building saves money for its user, thereby increasing its value. For example, if the design is made in a way that there is natural lighting and cooling, the expense of electricity is reduced. The design also affects the economy in future maintenance works in a building.

6. Regulatory Benefits

A professionally designed building would follow all rules and regulations devised by the authorities, limiting future complications regarding paperwork as well as health and safety issues.

The Integrity of Real Estate & Architecture

Architecture and real estate make up the landscape and economy of a country. The management, business, investment and economic aspects of real estate, along with the creativity of architectural design works integrally contribute to a country’s development.

A single structure can be capable of changing the market values of all properties in its locality as a whole. For instance, the uprise of a bridge would reduce transportation costs significantly, and people would find the ease of travel attractive.

The real estate market value of a property depends on its physical features and location, both of which can be strategically planned through architectural principles. While looking for a property, an average person would want the following from it:

  1. Health, comfort and increased quality of living
  2. Social Structure: Fewer crimes and accidents in the neighbourhood, inclusiveness in the community, integrated functioning etc.
  3. Economic Feasibility: Lesser expenditure, less cost of living, increased productivity etc.
  4. Eco-friendly Environment: Reduced energy use, lesser carbon emission, reuse and recycle of materials, less wastage and pollution etc.

In Summary

In some ways, the effect of architecture on real estate market value is not easy to understand. This is due to the variables when it comes to personal preferences and ideas. Generally, a good design is proven to command a price premium on the property and has a positive result in the financial returns from the property.

Also read: What Mistakes to Avoid So That Real Estate Can Give You a Return of 12-15 Percent?

Most of the architecture’s influence on the market price of a property comes from the property’s larger impact on the location.

Architects are responsible for preserving, improving and creating a quality “built environment”. The quality of the built environment directly impacts the market values of all the properties within. 


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