Real estate investments are popular means of wealth creation. So no wonder India’s housing market remains bullish despite layoffs and tough global economic conditions lately.
You could be in a tight spot while deciding whether to opt for the size or the location of a house you want to purchase. Here’s what you should consider before choosing.
Real estate investments are popular means of wealth creation. So no wonder India’s housing market remains bullish despite layoffs and tough global economic conditions lately.
Real estate services company Anarock said that quarterly housing sales in India’s top seven cities and regions, Delhi-National Capital Region (Delhi-NCR), Mumbai Metropolitan Region (MMR), Bengaluru, Pune, Hyderabad, Chennai, and Kolkata, reached an all-time high.
These places saw a 14 per cent increase in housing sales, or 113,770 units sold, in the first quarter of 2023, compared to the same period in 2022. Its study further showed that most investors believe that real estate is a better investment than FDs, gold, or stocks.
Moreover, when buying a house, size and location are critical factors influencing their decisions. In the metros, the demand is higher because of more job opportunities. However, before you decide on buying a house in a metro or smaller city, you should consider the following aspects.
Determine Your Requirement
If your family has 5-6 members and if you receive guests now and then, you may consider a bigger house instead of a prime location.
Age Factor
Also, if you buy a house near your retirement age when your children would possibly be working or about to start work in different cities, a bigger house may not be a suitable choice. You may even buy a house in a good neighbourhood with low maintenance costs.
Commuting & Other Facilities
You should also consider the commuting time from your house to the office or its proximity to commercial hubs. It may look cheaper when buying a home in a far-flung area, but after you start living, most of your time might be wasted on the daily commute.
If you are middle-aged and have school-going children, you should check the available schools in the area. Also, consider whether your child will get admission into the selected school. However, the situation would considerably change if you have college-going children or not buying the house for your use.
Renting Out
If you are in a transferable job or the work requires moving from one place to another, renting out the house could be an option, so the location would be a decisive factor as it will determine how much income it will generate. Also, many millennials shift cities for work and often buy houses as investments. So a better-connected property with commercial and public amenities will give better returns than a large isolated villa.
Resale Value
If it is your second house, you must pay more attention to its resale value. The location could be one of the key factors in value appreciation, but also consider what other nearby properties offer. Thus, considering the average demand and price range, you can invest in a house that can be sold quickly at a higher price.
Anarock report says there are nearly 6.26 lakh available units across the top 7 cities at the end of the first quarter of 2023. Of this, around 31 per cent of the inventory is in the high-end segment of Rs 80 lakh-Rs 1.5 crore, followed by 30 per cent in the mid-segment, Rs 40 lakh-Rs 80 lakh, and 26 per cent in the affordable segment (less than 40 lakh). The remaining 13 per cent of the inventory is in luxury and ultra-luxury segments (Rs 1.5 crore-Rs 2.5 crore).
Due to the high demand for homes in the mid-segment, developers are ramping up supply in this segment, which accounted for 36 per cent of the new supply share.
Location and the neighbourhood are important factors that bring value during resale. Note that you can change the house’s interior anytime, but you cannot change the location. So find a trade-off between size and location within your budget.