What A Buyer Should Look For While Purchasing Affordable Homes

Consumers are investing in the luxury of more space. What remains unchanged however is the requirement for the said space to be affordable. Therefore, the homebuyer today has a view on ownership which more nuanced than previously. Affordable homes can no longer be those where the overall ticket size is small, as is the space and utility.

A major change that is at play as a consequence of the events of the recent past has been the home-seekers shift away from the desire to rent a home – therefore being ‘asset light’ – back towards home ownership. Furthermore, this desire has now shifted away from smaller homes to larger ones. This is on account of the fact that home buyers have started to view their homes as more than just places to spend evenings, nights and weekends in, and spaces that potentially may need to function as a home-office or pseudo-online-schools for their kids, for instance. As a result, the consumer is now looking to upsize her purchase, opting for homes with larger rooms and even an additional bedroom/study, when benchmarked to her pre-pandemic preferences. Consumers are investing in the luxury of more space. What remains unchanged however is the requirement for the said space to be affordable. Therefore, the homebuyer today has a view on ownership which more nuanced than previously. Affordable homes can no longer be those where the overall ticket size is small, as is the space and utility. They have to meet her base preferences: those of larger living spaces, public utilities and amenities, all at a reasonable price. This is a very interesting shift which we have been witnessing across the sector.

Homes in cities like Mumbai are expensive – the city is land constrained and input costs (government premiums, land costs and recently, commodities) are dearer here than in most other places in the country. The regulatory environment is complex and capital markets for all but the largest of players are broken. These factors invariably end up making the cost of the home prohibitively expensive for most. Developers have come up with various interesting and innovative ways to mitigate this and foster affordability, some of which I will discuss below. Here are some such aspects a home buyer ought to look out for when considering the purchase of her home.

Optimal planning and appropriate amenities must be top-of-mind considerations for the homebuyer. She should look at buying a well-planned and spacious residence, which minimises wastage of space (in corridors for example) with generously sized living spaces and bedrooms. This will ensure that the home buyer gets maximum utility from the space for the price she pays for it. The project should also have high-quality amenities. It is important not to look at the number of amenities, but to consider whether they are conducive to a better lifestyle. A home buyer should remember that it is usually the case that the longer the list of amenities, the larger the monthly society outgoings when the building is constructed. It, therefore, makes sense for her to look for projects which house amenities that truly add value to her life.

Flexible or deferred payment plans and well-priced mortgages offered by developers and banks are another way in which affordability is enhanced and the home buyer should look out for these when purchasing her home. Some of these schemes allow for her to structure the payment of her instalments in a manner that suits her finances. They provide comfort with respect to an under-construction project’s progress – significant payments are made when the project is significantly developed – and also reduce her mortgage interest burden when compared to a standard construction linked payment plan, making the overall cost of the purchase smaller. Mortgage interest rates are also at historic lows – homeownership through a mortgage is cheaper now than it has ever been before.

Locality and convenience is a factor to consider while deciding on a home. The real estate market in each city/town differs drastically, as do sub-localities within the city/town. Extensive research into the consideration of a set of areas of the city will assist in making the home buying experience a pleasant one. Furthermore, a choosing locality with excellent connectivity and public transport will save the customer both time and money on her commute. However, the home buyer should act quickly once she has identified her desired home, as prices may change or choice inventory may not be available if too much time is spent deliberating on the purchase.

Recent events have resulted in the home now needing to provide far greater utility to its occupants than it once did. One consequence of this is that consumers are upsizing from their existing homes yet seeking affordability. We anticipate that this shift will remain. Innovative schemes, cheaper mortgages and better planning have come together to make home-ownership more accessible than before, a trend which we are watching keenly.

Sourced By:- Dynamix Group

We are a renowned real estate developer with 50 years legacy, developing apartments and villas across Mumbai, Thane, and Goa