It is better to buy a first house in any new upcoming area where it is available within your affordable range rather than postponing the decision to buy one in a choice location if it is beyond your means
Buying a house is one of the most important decisions one takes in his life. It is not only about the finances but also about the selection of a suitable property, which is important to make you feel good about your decision — after all, you are going to live with it (the decision) for a long time, if not for the rest of your life (in the house).
But many a times, it has been found that the property you have selected to buy is beyond your means. And the property, you can afford, you feel, is not suitable for you. This make you put off the plan for some other time.
However, even after a few years, when your income has increased substantially, you find yourself in a similar dilemma. What is even more frustrating is that the property that was affordable a few years ago but was found not suitable at that time has appreciated substantially to become unaffordable now.
However, even after a few years, when your income has increased substantially, you find yourself in a similar dilemma. What is even more frustrating is that the property that was affordable a few years ago but was found not suitable at that time has appreciated substantially to become unaffordable now.
You may discover that connectivity and social and physical infrastructure of the area in which you were not interested to buy a house a few years back have improved beyond recognition. But, unfortunately, the prices of real estate in that area would also have almost trebled in the same period. What is intriguing is that prices of houses in the areas which were in the central part of the city have not appreciated that fast. But still, they remained beyond your reach.
For example a few years ago — in 2004 for instance — the price of a three bedroom apartment in East Delhi localities like Mayur Vihar, Patparganj and Vasundhara Enclave was at around Rs 20 lakh. The price of a similar apartment in South Delhi at that time was around Rs 50 lakh. But today, the prices of apartments in East Delhi have gone up by six times and command nearly Rs 1.25 crore. At the same time, the appreciation in prices of apartments in South Delhi is not that steep. In fact, today, the prices are in the same range in both the localities. Now, what should a prospective ‘undecided’ buyer do?
Going by past evidence, it has been found that appreciation in the prices of recently developed real estate on the outskirts of a city is much faster than those in the central part. In the NCR also, property prices in Gurgaon, Noida, Indirapuram and Vaishali appreciated much faster in the last five years, than those in the central part. Now the prices in central parts of Noida and Gurgaon, which are closer to Delhi, have gone beyond the reach of the average middle class. In these areas, apartments are commanding prices of around Rs 6,000 per square feet. The sale price of a 3-bedroom apartment is over Rs 1 crore.
But, the good news for the average middle-class buyer is that a number of new projects have been announced in the affordable price range of Rs 15 lakh to Rs 40 lakh. A large number of apartments and independent houses are being developed in areas like Noida Extension (Greater Noida, Sector 1-4), Noida-Greater Noida Expressway, Greater Noida, Gurgaon Phase V, Sohna Road, Manesar, Daruhera, Faridabad-Nahar Paar area, Kundli and Sonipat, among others.
As the NCR has witnessed a spurt in infrastructure development, connectivity to these areas is likely to improve. It has been found that the local authorities are keen to bring in the Metro rail connectivity to these areas. There are reports that the authorities of Greater Noida, Ghaziabad, Meerut and Faridabad have been in discussion with the DMRC to take the Metro train service to their respective cities. Besides this, the NHAI is also working out a plan to widen existing national highways. This will be a great relief to most of the new developments, which are coming up on the outskirts of the NCR as this will reduce the travel time to the central part of the city.
Besides this, as many of developers are coming up with townships on large land parcels of over 100 acre, the provisions for social infrastructures like schools, hospitals, and local markets are also factored in. Not only this, most of the new development hubs which are underway on the outskirts of the NCR are also developing commercial properties like IT parks, hospitals, hotels and office space so that a large number of residents of the area could find employment there itself. Some areas like Kundli and Greater Noida have a number of educational institutions including engineering colleges, medical colleges and vocational centers coming up in their locality.
Many of these areas will change beyond recognition after a couple of years. Therefore, if you want to buy a house but are undecided, take a decision on the basis of the property's future projection. However, you must be very conservative while doing so. Don't take all the promises and projections at their face value. If an apartment is quoting at a price of Rs 3,000 per sq feet at a certain distance from the central part of a city, you can consider buying a house in a new upcoming hub at a similar distance at around Rs 2,000 per sq feet. After you get the possession in three-four years’ time from the date of your purchase, if you still want to buy a property in another area, you can sell this property with some capital gains. This, in fact, will help you in buying the new house. If it is your first house, you will not have to pay any tax as you are using the money to buy another house to live.
Therefore, it is better to buy a first house in any new upcoming area where it is available within your affordable range. As you can't shift to these houses immediately, you must make a provision for paying rent for three years. For this, you can also choose construction-linked payment. In this, your EMI will increase as the bank will release funds to developer on the basis of the completion of construction. This will save you from the payment of EMI and rents simultaneously to a great extent.
QUICK BITES
GOING BY PAST EVIDENCE, IT HAS BEEN FOUND THAT APPRECIATION IN THE PRICES OF RECENTLY DEVELOPED REAL ESTATE ON THE OUTSKIRTS OF A CITY IS MUCH FASTER THAN THOSE IN THE CENTRAL PART OF THE CITY
GOING BY PAST EVIDENCE, IT HAS BEEN FOUND THAT APPRECIATION IN THE PRICES OF RECENTLY DEVELOPED REAL ESTATE ON THE OUTSKIRTS OF A CITY IS MUCH FASTER THAN THOSE IN THE CENTRAL PART OF THE CITY
Courtesy by Times Property Dtd : August 21, 2010
For more information about real estate, property, residential property, realty firm, commercial property, commercial real estate, real estate developers log on to http://www.zameen-zaidad.com
