[ecis2016.org] There are four stages to buying a home. Surprisingly, affordability is most definitely not the first
There’s a common dilemma plaguing the average home buyer: what is the right property in the right market, and at the right price point? Without scientific research to help home buyers make an informed decision, people often do one of two things. They either concentrate on the short-term wants, overlooking the long-term ones, or are confused between the end-use necessities and quest for appreciation.
You are reading: What’s most important: Property, price or location?
More often than not, the home buyers’ wants and needs contradict each other; there is no clarity on economic rationale and emotional urge; and a clear view of the parameters that form the livability index is missing.
There is definitely a need for better research on the subject to help both, the developers and home buyers. This could bridge the demand and supply mismatch too. Analysts point out that it all depends on the home buyers’ preference for a location and what value that holds for him.
Unfortunately, people often get confused between value and price point. There is a need to look at the overall value of the house. A home buyer may be paying an extra premium for the said property if the right value additions are provided. Naushad Panjwani, managing partner, Mandarus Partners LLP, asserts that the value of a project lies in the eyes of the beholder. The mistake most make is to look at a self-use house as an investment. First, they compromise on the quality of the house because they want to invest in a place that will appreciate. Then they would compromise on the basic needs that the house has to be equipped with.
“In a market where the rent is just 2-3%, even 1% in a place like Noida, why should one buy a house for investment. I mean you can live on lease at walking distance from your office and have a better property 25 kms away,” points out Panjwani. “I think this is where we often fail to differentiate between investor and end-user,” he continues.
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According to Arvind Nandan, director – south Asia, with Colliers International, all that matters is how you conduct your life as a home buyer. First precedence is your career, and then there is personal and social life. So, other than the job catchment area, one has to make sure the vicinity is equipped with enough social support, healthcare, and ensure daily needs will be fulfilled. “Once these conditions are met, then the affordability factor comes in. It cannot be the other way round where one looks for affordability and then sees if the other conditions match,” explains Nandan.
“So, by filtering these two, most of the basic home search is done: whether it is livable place from the office and management of daily requirements. Then it comes to looking for projects matching the price band, and then which unit, etc. These are the four layers of a home search,” adds Nandan.
The right property, in the right market and at the right price point is quite subjective and circumstantial. However, what cannot be denied are the distinguishing factors between the right product in the market and way-too-ambitious project. These include job catchment area, median income of the population and social needs.
(The writer is CEO, Track2Realty)
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