Do park-facing apartments deserve a higher price?

[] Although park-facing apartments in the NCR have always commanded a premium, with the amount varying depending upon market conditions, we analyse if they deserve a price premium

Parks are an important feature of contemporary, landscaped housing projects. While such projects command a premium, park-facing apartments within the project are also priced higher than those which are road-facing or towards a corner. For example, a well-known developer’s residential project in Gurgaon, has a base rate of Rs 5,500 per sq ft. Within the same project, each flat carries an additional preferential location charge (PLC) of Rs 300-500 per sq ft. The ones facing the park have the highest PLC. A similar scenario can be found in neighbouring Noida and Faridabad, as well. Nevertheless, the percentage of green cover, differs from one city to another.

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Confusion over the extent of greenery

A number of national-level government agencies, have indicated the importance and significance of parks and open spaces. For example, the National Building Code says that open spaces should be 15% of the area of the layout, or 0.3 to 0.4 hectares per 1,000 persons. For low-income housing, the open space shall be 0.3 hectares per 1,000 persons.

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The manual on norms and standards for environment clearance of large construction projects by the Ministry of Environment and Forests of the Government of India, also states that parks and green cover are important for several reasons – to provide a balanced climate, to control noise and to be used as a hedge on the outer limits of aerodromes and railway tracks.

While parks and open spaces may have distinct definitions, various authorities and state-level bodies have clubbed the two into the same category. For example, Punjab Urban Development Authority says that in a residential development of 100 acres, land use for parks/open spaces should be 5.7 acres. This has led to confusion.

The rationale behind the premium

Nitin Chaddha, a Gurgaon-based realtor, maintains that “The premium that is charged for park-facing apartments, is related to the benefits of living next to green areas.” Developers too, continue to incorporate landscaped parks in their projects, although these may or may not fulfil the needs of a larger population.

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Owing to the design of the entire project, a premium is levied on park-facing apartments. The difference in price, between a park-facing apartment and one that does not overlook a park, is 10% to 20%, depending on the price that is finalised for the deal.

A similar trend exists in the resale market. In the established markets, properties located near a district park are costlier than the ones that are far away from the park. According to industry experts, during the boom period, the difference between the two types of properties, was almost 50%. However, it is also crucial to have a clear distinction between the two types of properties. “For now, due to the high demand, parks have turned more into open spaces, especially in Noida” points out a broker from Noida, who wishes to remain anonymous.

The new fad

Of late, there has also been a surge in demand for properties near water bodies or even commercial developments, such as airports or a golf course. For example, when the work on the proposed golf course in Dwarka began, there was a surge in property transactions in the neighbouring sectors.

What should one do?

Book parks-facing flats, only if you see a real benefit, cautions Arun Kumar, a channel partner and a consultant in Noida. It makes no sense to pay the premium, if one is going to live on the 20th floor and opt for a park-facing apartment. Buyers should also try and negotiate on the price with the builder, he suggests.

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Category: Lifestyle

Debora Berti

Università degli Studi di Firenze, IT

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