The favourability of a piece of property for a potential home-owner still depends largely on his/her needs, sentiment and economic position at the time of purchase.
The decision to buy a home is one that is influenced by several factors and analysed carefully over a period of time. Buying a house is an investment for the future and property decisions are not based only on the size of the living facility. Instead, several elements like location, budget, security, convenience, amenities, and maintenance costs are taken into consideration. Further, the decision regarding what kind of home one buys is largely based on one’s stage in life and what one is looking to gain from that home. Like most decisions in life, buying a home also involves prioritizing aspects that are important to you.
For example, some may prioritize commute/location over amenities while others wouldn’t mind compromising on location for amenities. Therefore, a large part of the homebuyer’s decision making is about what he/she prioritizes and what he/she is willing to compromise on. Often these compromises and priorities lead you to decide on purchasing a home in Townships or Standalone buildings. There are clear advantages to both options and, therefore, to campaign unilaterally in favour of any one is probably being unfair.
With gated communities or townships, one is often assured a wider range of amenities and green spaces. This is probably one of the most compelling reasons that buyers chose townships over stand-alone buildings. Buyers with retired parents and small children also prefer townships because their families usually have enough to keep themselves occupied both in terms of activities as well as company. Some of the larger townships also have facilities like schools, colleges, hospitals, malls, movie theatres and large club houses which add a sense of convenience to one’s day to day life.
Further, large townships or gated communities often come with the sense of security and safety and consequently provide peace of mind. The downside to choosing a township, however, is that since large tracts of land are not available in the city, townships are typically located far away from city centres and, therefore, result in long commutes when travelling to and from business districts within the city for work. This often can be a cause of immense stress and frustration.
Further, outgoings or maintenance costs tend to be higher when residing in a township and, therefore, create a situation of higher outflows every month, thereby creating a strain on monthly cash flows.
When it comes to stand-alone buildings, choices within a particular location tend to be plentiful and, therefore, homebuyers have several choices within a particular micro market. They are often within city limits and public transport tends to be more easily accessible, thereby making commuting easier and shorter. Also, since cooperative housing societies tend to be smaller in stand-alone buildings, one is likely to have more control over the management of the society and rules and regulations that govern the way one lives. This also plays an important role in re-developments and general consensus that may be required for repairs etc. Needless to say, maintenance in most cases is easier on the pocket in the case of stand-along buildings. On the downside, with smaller parcels of land, amenities and open spaces tend to be fewer; which often creates lack of social and sporting infrastructure forcing people to resort to joining private clubs etc at an increased cost.
Lastly and most importantly, it’s important to consider the pricing and investment angle of choosing between a township and a stand-along building. All things remaining equal, usually homes in stand-alone buildings fall within a lower price bracket relative to those in townships. For instance, from a renter’s perspective, in a city like Navi Mumbai, the average rental rates for a 1-BHK in a standalone range between Rs 10,000 and Rs 12,000 per month. In a gated community or township, on the other hand, rents go up to Rs 15,000 to Rs 20,000 per month. This makes standalone flats highly affordable and a much more suitable option for bachelors and home-owners with limited financial resources. This is also a result of higher outgoing that need to be paid by the owner. From an investment perspective, however, all things considered equal, percentage increases in prices are driven more by the quality and maintenance of the complex or building and therefore picking a clear winner based purely on size of development will not be accurate.
At the end of the day, the favourability of a property for a potential home-owner still depends largely on his/her needs, sentiment and economic position at the time of purchase. While today, most families usually opt for townships and gated communities owing to the added security and amenities, young bachelors and the like tend to favour standalone apartments, because of their affordability and largely reduced restrictions.
(By Farshid Cooper, Managing Director, Spenta Corporation)