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Your Affordable Home Could Actually Be A Luxury

Your Affordable Home Could Actually Be A Luxury

Your Affordable Home Could Actually Be A Luxury
(Dreamstime)

The emphasis on the word affordable has been immense in the world of real estate across the globe. Countries across the world, especially developing nations such as India and China where the population growth has been extraordinary, are busy finding ways to provide affordable housing to teeming numbers. One popular way of solving the housing problem is using city fringes to provide affordable housing. For instance, you have to spend at least Rs 60 lakh to buy a 1BHK home in a decent locality in the national capital. If you move to the fringes, you can find a much bigger house for half the money or even less – a great affordable alternative. However, do not be misled. This house could prove to be a luxury in the end.

Saving tactics

To meet targets set under programmes to provide housing for all, governments across the world incentivise affordable housing. From a profit-making perspective, such projects are often not idea for developers. So, smart savings tactics are employed to keep the project cost down as low as possible. Invariably, only minimum standards are followed which carrying out such projects. This in turn makes this house for a homebuyer must costlier than he could have imagined. In case the quality of materials used in such buildings are not as good as it should have been, the average life of the property would also be lower. Not to mention the fact that the properties resilience to natural calamities would be quite weak, too.

The same is true of amenities and facilities, too.

"Construction savings on features such as insulation, passive solar design, and heating and cooling systems mean such houses have high energy demands. That, in turn, means ongoing living costs such as the cost of air conditioning remain high for the life of the house," says Mark Gibbs, Chair, Green Cross Australia. This not-for-profit organisation is dedicated to increasing community resilience to natural hazards and climate change. 

Going the distance

You most certainly do not have a choice in the matter if monetary constraints force you to pick a remote location to buy a house. Properties in central localities may not be on cards for you for now. The present money crunch then forces you to pay through your time, energy, and worst of all, more money. You spend three precious hours of your daily life in commuting up and down to your workplace, which is a place close to the central business district. Assuming infrastructure development is at the early stages in the remote locality, you will have to use your vehicle for travel. Apart from killing your energy, this mode of transport will burn a hole in your pocket. And, even if the rising pollution levels are the least of your concern, regular exposure to pollution-emitting automobiles will also not be good for your physical health. Your medical bills are going to shoot up in all likelihood.

What is in store?

You may have bought the property only for a short term. As soon as your financial position gets comfortable, you might be planning to buy a home close to the city. While planning all of that, you would have factored in an appreciation in prices of the existing property. However, great price appreciation is another thing you cannot be sure of.  “Housing in the outer suburbs has poorer prospects for capital growth, effectively trapping poorer households on the fringes of our cities,” says Gibbs.

As far as major Indian property markets are concerned, prices have not seen much appreciation across segments in the past five years, extending the wait of expectant sellers.

Also Read: Why There Is A Need To Make Affordable More Affordable

 

Last Updated: Wed May 31 2017

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