The value is estimated by analyzing the growth in demand for real estate and the availability of properties. This demand-supply analysis provides a fair idea of the property's value.

Property valuation is essential for determining the accurate value of a property during its sale and purchase. It also helps in tax calculation, evaluating return on investment, assessing income potential, and loan matters.

Banks consider the age of the property. For example, if you are selling a house 20 years after its construction, the selling price minus depreciation is calculated using the formula: Number of years since construction divided by the total useful life of the building.