The myth of the af­ford­able home

In­dian home­buy­ers to­day need to be re­al­is­tic to ac­cept that the ‘ideal home’ is more or less unattain­able and must not get car­ried away to buy a house that is not in sync with their fi­nan­cial re­al­i­ties or other prac­ti­cal re­quire­ments

Hindustan Times (Chandigarh) - Estates - - FRONT PAGE - San­thosh Kumar let­ters@hin­dus­tan­times.com The au­thor is Vice Chair­man ­ ANA-ROCK Prop­erty Con­sul­tants

You read of it in ad­ver­tise­ments and on hoard­ings, and hear of it in ra­dio jin­gles and TV com­mer­cials -the ideal home, or‘ dream home ’. It makes you won­der if you’ re liv­ing the life­style you truly de­serve, if your pre­vi­ous home pur­chase de­ci­sion was too hasty and if there is a chance you could do bet­ter. The ‘ideal home’ is a ubiq­ui­tous mar­ket­ing con­cept, and it haunts buy­ers be­fore and af­ter a prop­erty pur­chase. But is there re­ally such a thing in In­dia?

THE ‘IDEAL HOME’ PARA­DOX

By and large, the con­cept of an ‘ideal’ home is very rel­a­tive in this coun­try.

While ev­ery­one car­ries a pic­ture of their dream home in their hearts, that im­age usu­ally can not trans­late into re­al­ity in this coun­try.

Peo­ple long to stay close to na­ture, yet also close to the ex­cite­ment and op­por­tu­ni­ties of the city. They long for a home in an en­vi­ron­ment un­pol­luted by noise and ve­hi­cle emis­sions, yet de­pend heav­ily on pub­lic trans­port and roads to use their per­sonal ve­hi­cles for com­mut­ing to and from work.

Even the rich­est of the rich have to opt to have their pri­mary homes in the city so that they can re­main wired into their var­i­ous busi­ness in­ter­ests - al­though quite a few can and do opt to live at elite ad­dresses with bet­ter in­fra­struc­ture, more green­ery and no over­crowd­ing.

That is not an op­tion for the big­gest chunk of mid­dle-class In­dian home­buy­ers, for whom home pur­chase al­ways in­volves com­pro­mise on their vi­sion of an ideal home for them­selves and their fam­i­lies. Not only are they con­strained in terms of how much they can af­ford to spend, but our cities them­selves have sev­eral in­built con­straints. In fact, the big­ger they are, the more the con­straints tend to be.

In­dian home­buy­ers to­day need to be re­al­is­tic enough to ac­cept that the ‘ideal home’ is more or less unattain­able, and are con­tent with set­tling for the best they can get.

YEARNING FOR THE ‘IDEAL HOME’

In their search for the ‘ideal home’, In­dian home­buy­ers can get car­ried away on quite a few fronts. They may over-lever­age their bud­get to buy a larger flat than their fi­nan­cial sit­u­a­tion jus­ti­fies, in lo­ca­tions which - while def­i­nitely hav­ing a cer­tain so­cial ‘feel-good’ fac­tor - may not nec­es­sar­ily de­liver an im­proved life­style. They may give in to their as­pi­ra­tion to live in a less clut­tered and less pol­luted area, and asa re­sult be­come stuck in a lo­ca­tion bereft of ba­sic fa­cil­i­ties such as reg­u­lar wa­ter and elec­tric­ity sup­ply, or ac­cess to im­por­tant so­cial in­fra­struc­ture s like shop­ping, schools and hos­pi­tals. Such homes will not see any real cap­i­tal ap­pre­ci­a­tion, elim­i­nat­ing the po­ten­tial for putting them back on the mar­ket to move to an­other area. On the flip-side, they may lay ex­ces­sive im­por­tance on the abil­ity to com­mute to and from work con­ve­niently and wind up buy­ing a home in pol­luted, stressin­duc­ing area that com prom­ises their phys­i­cal and men­tal health. The ‘ideal home’ would pro­vide all the con­ve­niences with­out the com­pro­mises, be af­ford­able and have great re­sale value. With that be­ing an elu­sive dream, home­buy­ers may fo­cus on one or two items on their wish list and not pay enough at­ten­tion to other im­por­tant fac­tors.

RERA-A RAY OF HOPE?

Lu red by prom­ises of their dream home at at­trac­tively low rates, count­less In­dian home buy­ers fell prey to mar­ket­ing hype in pre­vi­ous years-and paid a heavy price.

Now that R ERA is in place, the risk of buy­ing into a project that gets un­duly de­layed or does not take off at all has been greatly re­duced, as has the po­ten­tial for low-grade con­struc­tion.

Also, the cur­rent mar­ket presents buy­ers with the op­tion of buy­ing a de-risked ready-to- move prop­erty at a rea­son­able price which can be fur­ther ne­go­ti­ated.

How­ever, the re­sale mar­ket still risky for ‘ideal home’ seek­ers. True, the re­sale mar­ket can of­fer prop­er­ties in as­pi­ra­tional lo­ca­tions which sat­u­rated long ago and can not sup­port new sup­ply.

How­ever, the re­sale mar­ket is not pro­tected by RE RA. Also, one may buy a flat in an old project which re­quires very high main­te­nance, or which turns out to be il­le­gally con­structed and may be de­mol­ished.

Also, over-lever­ag­ing one’s bud­get via a home loan in the quest for the‘ ideal home’ with­out a very clear pic­ture of whether one’s fi­nan­cial sta­tus will sup­port it over the ten­ure of the loan can re­sult in a major loss.

AD­VICE TO HOME­BUY­ERS

Home­buy­ers need to fo­cus on prop­er­ties which fall within their cur­rent and fu­ture bud­get. The home they buy now should ful­fil their re­quire­ments for at least 4-5 years. For the next 2-3 years at least, it will be point­less for an end-user to en­ter the mar­ket with an in­vestor’ s mind set and hope to be able to up­grade quickly if the flat turns out to be a bad choice. For the same rea­son, it makes no sense to buy in a cheaper project or lo­cal­ity which lacks the ba­sic in­gre­di­ents of a sat­is­fac­tory life­style.

Given the cur­rent mar­ket en­vi­ron­ment, one needs to find a good mid­dle-ground and make the best home pur­chase de­ci­sion pos­si­ble un­der the given cir­cum­stances. It is highly ad­vis­able to use the ser­vices of a rep­utable prop­erty con­sul­tancy, which can elim­i­nate the guess­work and de-risk the fi­nal de­ci­sion by al­low­ing the buyer to ex­am­ine all facets of ev­ery op­tion with the ben­e­fit of ex­pert guid­ance. Most first-time home­buy­ers are not equipped to fore­see the many po­ten­tial pit­falls in­her­ent in an un­wise prop­erty pur­chase de­ci­sion.

The con­cept of an ‘ideal home’ tugs at the heart-strings, but a home needs to be bought with the head, not the heart. The heart-or, to be more ac­cu­rate, the emo­tions - can be a good ref­er­ence point, but buy­ing a home should not be an emo­tional de­ci­sion and be steered by logic, due dili­gence and bal­anced ex­pec­ta­tions. The head is the seat of ra­tio­nal de­ci­sions, and it must be from there that home pur­chase de­ci­sions are taken.

MINT/FILE

The ‘ideal’ home is a ubiq­ui­tous mar­ket­ing ploy and the con­cept is rel­a­tive across the coun­try

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