Bottom Line: Affordable homebuyers must understand their wants and needs to not get duped by the fancy marketing jargon of builders.
“Let’s face it! We all have unrealistic expectations when buying a house. We often forget about our budget and end up stretching it to fall into debt trap. It happens because we want the best of everything even though we are in the property market to buy a budget home or affordable home. I am not sure to what extent it is human tendency or to what extent we fall into the fancy trap of developers. But today when I look back I think I should have been more realistic when buying my house. There is no point paying almost all the salary in the EMI now,” says a repentant homebuyer in Mumbai.
Well, not many would like to admit it as openly as this homebuyer but the fact remains that the buyers of affordable homes often forget their wants and needs when they enter the property market. The temptation to have one’s home is palpable and many of the first time homebuyers make the mistake of stretching beyond the financial limits.
How many affordable homebuyers who leave to work early morning and come back late night actually need amenities like free Wi-Fi, amphitheatre, club, tennis court, swimming pool etc? Are many buyers in the average salaried class in a position to avail these facilities even though the developer has created e everything within the project? How long such fancy amenities are maintained once the project is over and the monthly maintenance charges are a huge issue?
The critics of this theory might question as to why not the buyers of affordable property be given these amenities. The reasons are many – ranging from the increase in loading percentage vis-à-vis the usable carpet area to cost of maintenance of these amenities every month. In a housing market like Mumbai where the majority of the homebuyers in the affordable segment are expat professionals having both time and budget constraints it simply defies logic to expect fancy amenities.
With the reasonable expectation of a roof over the head not very long ago, the real estate boom in this part of the world has scaled up the liberty of choice for the average homebuyers. While the aspirations of even the middle and lower middle income with moderate budget have gone up, there are very many residential projects launched in recent times that seem to fill the gap with the promise of hi-tech amenities, luxurious lifestyle, lush green surroundings.
Analysts therefore recommend that the average homebuyers must know their budget and needs to avoid the additional financial load. What you may want does not necessarily fit into your budget segment and the quest to have something more is endless. The smart builders do understand this temptation of gullible homebuyers and in the absence of homebuyers’ education in this part of the world their temptation is what sells the fancy marketing offerings of the developers.
Developers, on their part are conscious of this homebuyers’ temptation. The point out that the developers are just catering to what the market is looking for. Harjith.D.Bubber, M.D & C.E.O, Rivali Park agrees that nowadays a homebuyer expects gated community as a part of affordable housing. “External amenities like club house, swimming pool, open areas for children to play, minimum one car parking is the basic expectation of the homebuyer today even in budget housing.”
Parth Mehta, Managing Director, Paradigm Realty, on the other hand, suggests caution when he says that when a person is buying an affordable housing with budget constraints one should keep in mind some basic things. His suggested checklist is more about basic sanctions and clearances than amenities to ensure the timely delivery of the project.
“To invest in a property where developer has complete approval like IOD, CC is more important for someone who is spending his lifetime savings. The title of the property should be clear and marketable. One must also check the credentials and standing of the developer in the market,” says Mehta.
Some of the developers try to find a method in the expectations of affordable homebuyers. They feel it is more to do with how the developers define the demand of affordable housing. Affordable homebuyers too should be given liberty of choice as far as upgrading the lifestyle is concerned.
Nikhil Hawelia, Managing Director of Hawelia Group says there is nothing wrong for a low-ticket buyer to expect the quality experience. According to him, instead of compromising on the quality of amenities that the modern homebuyers want (and often also need) the budget segment should be determined by the distance from the main city and the work place. If one is ready to travel an hour or so for getting a luxurious feel at home, the market should be ready to respond to this set of buyers as well.
“I believe in today’s market place where most of the young buyers are aspirational, even when they have budget constraints, their budget should be a criterion only for location and the size of the apartment. They should not be devoid of modern amenities and that is how a new emerging segment of affordable luxury can meet the market expectations as well during the slowdown. This is how urbanization has evolved the across the world,” says Hawelia.
Analysts for quite sometime are pointing out to mismatch between homebuyers’ preference and the ground realities. While value addition is something that drives homebuyers across the segment of housing, in affordable housing this value addition has an altogether different connotation. More usable spaces, since most of the affordable housing units are smaller in size, is a better value addition than lowering the usable carpet area for the sake of badminton court or amphitheatre kind of fancy offerings.
As a thumb rule, if the budget is just for the affordable home and the homebuyer is moving from a rented flat to his own, one should first of all look at the location and distance from the work place. Since most of such projects are on the periphery of the city, one must also look for the infrastructure within the project. Usable carpet area is next and the fancy offerings & amenities are definitely the last in the checklist of affordable housing.
By: Ravi Sinha