Liase Foras Independent, non-brokerage realty research company
Liase Foras Independent, non-brokerage realty research company
Independent, non-brokerage
realty research company

Scientific framework

Scientific concepts that unravel the realty mysteries form the very crux of our advisory services. The value of an asset is driven by science more than anything else. For instance let us examine Mumbai Metropolitan Region’s property price behaviour between Jan 05 and Jun 09.

We have proved by our brainchild Magnet Theory that property prices of locations are the function of their travel time from the Central Business District (CBD). Closer a location to a CBD; higher will be its value!

This well established model tested over the years across numerous countries denotes a very high correlation between price and workplace. It also suggests that people select location of their stay on the basis of its distance from their workplace. In other words, convenience to commute to and fro the workplace plays a vital role for any abode seeker.

MMR Price Pattern

Time is measured from CBD - Travel time vs psf rate

Governed by the exponential equation, the prices of Jan 2005 as well as Nov 2008 show a correlation of more than 85%.

This signifies that the so called irrational real estate price pattern is governed by an unseen science more than anything else. People choose a location to stay on the basis of its distance from their workplace.

The locations closer to the CBDs are costlier than those far away.

Jan 2005 Prices

This graph indicates how rapidly prices increased in MMR between Jan 05 and Nov 08. While the base price jumped up from Rs 1,000 psf to Rs 5,000 psf the maximum range skyrocketed to Rs 45,000 psf from Rs 8,000 psf.

This shows that rates of one location generate cascading effect across all locations.

Nov 08 Prices

The correlation between the two indices weakened in this graph. It happened as the prices of some of the distant locations exceeded expectations of general buyers. Such locations cannot command premium even if they become host to high-end or luxurious projects.

March 2009 Prices

Product upgradation or positioning cannot fetch the desired premium. It’s the distance to the workplace that finally determines the price of a location.

June 2009 Prices