by Anushree Ghosh,
After economic liberalization took place in 1991, India witnessed a free flow of capital in real estate that positively impacted the growth of this sector and attracted foreign investments. 2001 -2008 was a period of high growth when many projects worth millions were initiated by developers. The global economic slowdown of 2008 had some impact on the Indian market, suddenly, a large chunk of investment went away from this sector. However, the real estate sector started a gradual recovery. Although, demonetization by the government proved to be a hindrance in the ongoing growth; real estate came back to a steady pace after a break of a few months. Also, new initiatives like the Real Estate Regulation Act (RERA), Benami Transactions Prohibition Act, and Goods and Services Tax (GST) by the government brought some amount of transparency in the sector.
The real estate is mostly driven by market sentiments. Therefore, these policies do matter. Though, there are many other factors as well, which are instrumental in the development of a real estate project.
The economic, cultural and structural factors that one should consider while calculating the right value of flats are:
Don’t pay more for less! The top factors on which the valuation highly depends are the layout, interior of the flat and most of all the quality of the materials used. Therefore, always evaluate the price of the flat/property according to its architectural form, before buying such as:
- The overall look from all the sides of the flat.
- Source of ventilation and whether it will serve the purpose for the residents of the flat.
- The floor on which the flat is located and working condition of the elevator.
- The total carpet area, built-up area and super built-up area.
- Width of doors and windows, the height of the balcony and the area of other passages that will be used by the residents.
- of rooms and their sizes.
It’s all about the area you live in! The closer the commercial hub is to the place, the tighter its value gets. Location is the significant factor which influences real estate prices the most, as the better connectivity comes with a cost. So don’t be surprised when the broker quotes a higher price for flats in the prime location.
- Check the locality and position of the flat in the whole set-up —front side or read side.
The estimate of a flat is apparently based on the availability of essential amenities, which ensures your comfort not only in the house but in society. Following are the factors you should inquire before making the buying decision. The basic facilities are:
- Availability of water & electricity 24*7.
- Accessibility to public transport and safety in nearby areas.
- Landscaping around the property.
- Whether community facilities are available in the vicinity: sports facility, community clubs, shopping malls, schools, hospitals, etc.
- Proper parking facility.
- Total no. of floors and flats and available security for the community: guard and CCTV.
Among all the other determinants, don’t forget the generic features that people tend to ignore while flat hunting. The following factors can make a huge difference in the price and will keep you one step ahead of the seller/developer.
- Cost of construction and inflation in the market.
- The Registration status of society.
- The number of flats occupied and unoccupied in society.
- The reputation of the developer/builder in the market.
- The estimated resale value of the flat after 5-10 years.
- Capital required for maintenance and repair, if any.
- Age of the construction; old construction dilapidates quickly.
- Whether the building has undergone any pest control drill recently.
- Environmental factors that are sustainable in case of an earthquake or cyclone.
- Estimated life of the building without major repairs.
Zoning regulations also impact the price of properties. In case, construction is not allowed beyond a radius, the open spaces add a different tinge to the overall look.
Noticing the above-mentioned factors and ticking them one-by-one will help the buyer to negotiate with the seller and get the flat at a reasonable price.