[ecis2016.org] Homes with balconies often cost a premium in big cities. We examine whether it is worth paying this price, for home buyers
In the post-COVID-19 era, as the concept of cross ventilation, open spaces and wellness gains ground, balconies in apartments have once again become a focus area in urban real estate markets. While individuals from tier-2 and tier-3 cities may well be accustomed to the concept of expansive verandas, patios and porches, people brought up in cities like Mumbai, would definitely consider balconies as a luxury.
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For example, Prakash Kumar, a software engineer in Mumbai, spent his childhood in Patna, where the extended veranda of the house was larger than most 2BHK apartments in metro cities. Consequently, on moving to Noida, Kumar was quite dissatisfied with the cramped, five-ft balcony in his apartment. “However, only after moving to Mumbai for better professional prospects, did I realise what kind of a luxury that balcony was,” says Kumar.
Nonetheless, a premium has to be paid by the buyer, if they are looking for balconies attached to each room, especially in a city like Mumbai.
Is a balcony included in the floor area calculation?
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Whether or not the balcony of a unit is part of the carpet area of the house, is defined by the local development regulations and municipalities. In most municipal areas, only the air-conditioned or heated space, is considered in area calculations. By the given definition of open space, the balcony is not included in the carpet area.
In India, every city has its own set of regulations that builders have to adhere to. States like Uttar Pradesh, Haryana, Delhi, Madhya Pradesh, Himachal Pradesh and Rajasthan allow three to six-ft deep (it is 1.5 metres in most places) balconies, free of FAR (floor area ratio). However, there may be some conditions that the builders have to adhere to, in these states. In contrast, West Bengal and Maharashtra usually do not allow balconies free of FAR. Mumbai has rather put a premium through fungible FSI for balconies, where the premium could go as high as 60% of the carpet area.
Amit Modi, director of ABA Corp, points out that decks, balconies and terraces have been an intrinsic part of the offerings in north Indian real estate, where apartment living is a fairly recent concept, which has evolved from independent houses, kothis or bungalows. “The balconies are generally in proportion to the size of the house. One major balcony, mostly outside the living area, is a must-have for every apartment in this part of the world. The number of balconies and their sizes keep increasing, as you go up the price range. Nowadays, people prefer every bedroom to have its own balcony for abundance of natural light and air, along with a utility balcony just outside the kitchen/washing area. Yes, there is a cost element attached, due to the input costs, time and labour involved in the process but this is also an added incentive and selling point for the developer, as you go up the value chain of pricing,” he explains.
How does a balcony increase the cost of a home?
Construction companies maintain that a balcony that is up to six ft costs approximately 25%-50% more than what it would cost, in case of regular construction. Things get even more complicated in parts of the world that are prone to earthquakes, as the walls are often needed for shear panels and putting in a balcony forces other changes to the structure.
Rohit Garodia, managing partner, Pecan Reams, points out that home buyers are often faced with situations, where real estate spaces that come with an extended balcony command a premium. The total sq ft of outdoor spaces can be worth between 25% and 50% of the valuation of a sq ft of indoor space, which adds a good amount to the selling price of the residential space. “Extended balconies are no longer inexpensive. Prospective home buyers still show an inclination towards investing in a 2BHK apartment measuring 600 sq ft, as compared to a home with 550 sq ft of living area along with 50 sq ft of space being dedicated to extended balconies. The cost also depends on crucial factors like height, size, materials and finishes used,” says Garodia.
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Aditya Kushwaha, director and CEO of Axis Ecorp, points out that there are a lot of things, apart from the cost that one has to consider, while adding a balcony. “Making alterations, such as adding a balcony to an existing project, requires careful planning. One would also have to check structural provisions before starting work on it. So, it entirely depends on what stage the project is. In case of new constructions or projects that are under development, it can be easier to incorporate balconies and the project may even turn out to be better,” says Kushwaha.
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Now that the RERA mandates disclosure of carpet area and many cities have free FSI for the balconies, would it be challenging to justify the added cost with balconies? Industry trackers believe some of the developers include these additional costs in the main building cost. The justification on the part of the developers is that even when there is no added FSI cost for providing balconies to the home buyers, the balconies have a construction cost and are an added feature, depending on what is on offer. While low-cost housing may have one or two balconies, a premium project may have balconies attached to every bedroom. Luxury apartments may have huge decks which run the entire length of the apartment, both, at the front and the back of the apartment, to ensure cross ventilation, air flow and natural lighting. As a general practice, industry stakeholders concur that the developers must mention the cost of balconies in the total super area, for better comparison.
FAQ
Why do apartments have balconies?
The purpose of balconies in apartments, is to offer its residents with open space, within their own private residence.
Do balconies add value?
Balconies are seen as a value-added offering in Indian real estate and are more common with increasing ticket sizes. Balconies also add a premium to the cost of the property.
(The writer is CEO, Track2Realty)
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Source: https://ecis2016.org
Category: Lifestyle
