Money Blog

A cost estimate for buying a residential plot or built-up house

India is currently witnessing a real estate boom for some time now, although speculations and resulting analysis is vague, there seems to be no de-escalation either in the real estate boom or in the property prices. In fact, the property price graph just seems to be growing higher, as income levels are rising, so is the consumer demand for a better lifestyle. The Indian consumer is more aware, demands value for money as well as with MNCs hiring on a big scale, affordability is reaching a peak with a certain strata of society. Furthermore, with copious provisions of bank loans, home loans are just a phone call away. Today’s consumer looking for a fine housing does not have to look too far. Of course, with a plethora of options, one can find a fine deal that suits their budget.

Property is an investment which turns into an asset, that everyone is aware of. Now, property prices are currently on the rise especially in cities like Mumbai, New Delhi and Bangalore. In fact, in certain areas the property prices equal that of New York or London.

So, land prices are only going up primarily due to the rising building material cost. Over a course of time, the cost of constructing a house has gone up by 30-40%. Building material comes expensive at Rs2600 per thousand bricks and a packet of cement at Rs.200+. Similarly, the cost of steel has escalated to Rs2800 per ton as opposed to Rs.2200 last year.

With easy loan facilities and rising income groups, people are more than eager to move into high class state-of-the-art functional apartments, as the developers vie against one another to pace up with increasing demands. As the income brackets of Rs.20000-25000 becomes higher, so does the demand for high quality residential property. With lucrative schemes and easy installments, bulk bookings are made in advance for ready to move in flats.

Although property rates vary according to the location, city and a host of other factors determine the property value …. It seems developers are now venturing into providing affordable luxury to the lifestyle savvy consumer. In Mumbai Goregaon (West), a luxurious housing project comes at Rs.25-28 lakh. If one is looking for high-end housing, the top developers are offering this quality between Rs.60 lakh to 2.5 crore. The high cost appreciation of condos, justifies the rising demand for such properties. DLF’s premium apartment complexes have witnessed a price appreciation of 15 to 30 percent since last year.

In Bangalore, while the capital value has risen by 10-15 percent, Delhi and NCR experienced an escalation in capital value by 20 percent over the past year. This upward trend seemingly, is here to stay.

The demand for residential especially condominiums is on the rise as it proves to be quality and cost effective housing for the MNCs expatriate staff as well as corporate honchos.

In Mumbai, a quality residential property ranges between Rs.20-30 Lakh. The costs of “A” class buildings in Mumbai like ‘golden triangle’ hover at Rs 15,000-17,000 per square feet. Cuffe Parade in Mumbai comes at a price of Rs.8,000-12,000 per square feet and at Bandra it is Rs.8,000 to 13,000 per square feet. Nariman Point is supposedly the most expensive locale in India, where commercial properties command a price of Rs.8,000-12,000 per square feet. The Bandra Kurla Complex in Mumbai is again highly priced at Rs.7,000-9,000 per square feet.

Cities like Bangalore are witnessing a boom and a need for service apartments is on the rise as well. In the past year, there has been a two-fold increase in land prices in Bangalore, especially in areas like Whitefield and Sarjapur. According to statistical data, “In 1999, a premium spot fetched Rs. 2200 per sq.ft, while an average middle class space now commands Rs. 2500.” . A premium luxury apartment commands a price of over Rs.2700 per square feet. An average functional flat comes at Rs.900-1200 per square feet and a life style apartment with facilities like pool, gym, and club are priced at Rs.1500-1800 per square feet.  For ultra luxury housing, the apartments are ranged between Rs.10 million to 25 million.

The residential market in Chennai has not witnessed any dip in prices over the years, and has surprisingly remained consistent. With state of the art apartments high on the demand list; Chennai is experiencing a definitive boom in residential property, especially due to the IT industry dominating the city’s commercial activity. People are settling for areas like  Kotturpuram, Boat Club, Poes Garden and Wallace Garden, East Coast Road(ECR), Adyar, Vellacherry, Perringudi.

Kolkata on the other is gradually rising to the mark, albeit after a long lull. The residential property market is gradually and steadily evolving although not as fast as compared to Delhi, Mumbai or Bangalore. With Alipore considered one of the posh areas of Kolkata, the property prices are soaring and so is the demand for luxury abodes. To give an estimate, three to four bedroom flats and penthouses in Ashoka Complex provided by the Merlin Group are priced at Rs.74-130 lakh with the carpet area varying between 2,450 and 3,800 square feet. Likewise, four to six bedroom flats (2400-2800square feet) at the Merlin Terrace , are ranged between Rs.72 to 144 Lakh.

The residential demand is on the rise in Hyderabad and Secunderabad as well, primarily because of rising software companies. Among the most preferred and prime locations remain Banjara Hills, Jubilee Hills, Somajiguda, Panjagutta etc. which are again high priced. The epicenter of the city has become saturated and that has created a demand to develop better lifestyle structures and amenities away from the city.

Providing futuristic lifestyle remains the focus of the developers and with the income levels on the rise and easy loan provisions, people are ready to invest in an asset that delivers value for money clubbed with convenience, luxury and various options of affordable schemes.