Urban oasis or small-town charm: what will decide your ideal home?

And when the time comes to decide to buy that dream home, there are many factors to consider: its size, access to local amenities, amenities and facilities offered, infrastructure and logistics, reputation of the builder and more. Some. Nevertheless, an important deciding factor for many homebuyers has been location: which city would you like to settle in?

The lockdown induced by the COVID-19 pandemic has given working professionals an opportunity to move away from the hustle and bustle of metros to the relative peace of non-metros. This resulted in an increase in demand for real estate in smaller cities and towns, where many of them found the quality of life better. The trend was short-lived, though. The work-from-home chapter is almost coming to an end, with most companies calling their employees back to the workplace. While working from office is now the norm, many employees would still prefer to settle in non-metros, mostly as retirees. Some have already bought a home or are building one in these non-metros.

There have been other reasons for people to move to smaller cities. For example, long before Covid, there was a noticeable trend of Delhi-NCR residents relocating to the suburbs in view of the deteriorating air quality in the capital city. The move helped many people buy large and affordable homes in tier II cities that had sprouted up in suburbs, but it came at a cost: longer commute times to their offices.

Good infrastructure, easy access to healthcare facilities and cost of living are some of the factors that homebuyers deliberate upon before deciding on the city of their choice. Peppermint WebMD talks to four homeowners about the factors that influenced their home-buying decisions.

Prakash Bajpai, 63, Kolkata

Prakash Bajpai was faced with a strange choice as he neared his retirement – whether to settle in Dehradun or Kolkata. He inherited 400 square yards of land in Dehradun, which his father had bought in the 1970s. There was a small two-storied building on that plot. While he already had a flat in Kolkata, which he had bought in 2004 2 million.

The Dehradun property was more valuable in terms of market valuation, but it was a joint inheritance shared by Bajpai and his brother. “The plan was to renovate and expand the building at an estimated cost of 30 lakh per person so that each of us can get about 1,700 square feet of floor space,” the 63-year-old said.

A large location and high market value were not reasons enough for Bajpayee to settle in Dehradun. The priority was for infrastructure, proximity to airport, connectivity to other countries through flights and better healthcare facilities. And so, the choice was Kolkata.

“Kolkata has better water supply, wide roads and no major power cuts, whereas the core area of ​​Dehradun lacks these facilities. Furthermore, Kolkata is a better connected city as the airport is just 13 km away, while the Dehradun airport is 35 km away. Since Kolkata is a metro, it also provides better facilities for children,” said Bajpai.

Nikhil Deshpande, 35, Pune

In 2017, Nikhil evaluated several options for his real estate investment, including cities such as Pune, Latur, Mumbai, Nashik and Hyderabad. After careful consideration, he chose Pune over other options.

“One of the primary reasons was the guaranteed possession and quality of construction/amenities provided by Pune’s real estate market. I put these factors above other considerations, which at that time were not there in smaller Tier 11 and Tier III cities like Latur and Nashik. Also, Pune’s real estate market had adopted RERA, and it had a large number of projects approved for home loans by banks and financial institutions,” said Nikhil.

In comparison to Mumbai and Hyderabad, Pune offered a bigger house with similar amenities, and the growth rate in Hyderabad was not as promising in 2017 as it is today.

The process of securing Nikhil’s investment in Pune was easy, the project was pre-approved by leading banks, and he was able to negotiate a 5% discount. He also hired a lawyer to review all the property documents, which helped him get a good deal. Now, five years later, the area around their property located on DP Road near Amanora Park Town in Pune has developed tremendously, and the investment has proved profitable with high rental demand and a good ROI option. investment) if he ever wants to sell.

Overall, Nikhil is happy with his decision to invest in Pune. He paid the same price for the house that was offered in Hyderabad, but 60% less than a similar property in any western Mumbai suburb.

Anmol Jaju, 25, Mumbai

Anmol Jaju, a 25-year-old chartered accountant, faced a similar dilemma that most young professionals in Mumbai find affordable housing in a good location. After months of searching, they found the ideal location in the suburbs of Mumbai-Mira Road.

“Compared to other societies with luxury amenities, Shanti Park provided only basic amenities at low maintenance charges 4,000 per month. The society also has a rainwater harvesting facility which ensures uninterrupted water supply, which is an important factor in a water-scarce city like Mumbai,” said Anmol.

But for Anmol, it was not about the cost and facilities of the housing society. He wanted a social life outside his office circle. Mira Road offering a large apartment (3BHK) with all basic amenities at a price 1.40 crores. This is just one-third the cost of property in places like Borivali and Andheri for flats of similar size.

With its affordable housing options and ample amenities, Mira Road proved to be an ideal location for Anmol, allowing him to buy a home without breaking the bank.

Akash Manohar, 33, Bangalore

Akash Manohar and his wife have recently purchased a residential plot in a BDA approved layout in Bangalore. While searching for the right plot of land, he had set several parameters for himself. The first criterion was that the plot should be in a layout approved or created by the Bengaluru Development Authority (BDA) to avoid future legal issues. Also, where it comes to a BDA approved layout, bank loans can be easily availed.

“Investment value was another important criterion. Since we had no immediate plans to build a house, we wanted to invest in a plot that would appreciate in value over time. We have decided not to consider buying an apartment due to past bad experiences and poor maintenance issues from some of our relatives,” said Akash.

When it came to finding the right plot, they had two options – either search themselves or go through a broker they knew. Given their past experiences with brokers, they were cautious about using the latter. They also found that gated communities were priced higher than residential land in some BDA layouts. The prices of the plots he checked elsewhere also differed by about 30%.

However, they chose many gated community plots as they came with a lot of regulations and were too expensive considering the location. Some of the available plots were not in BDA-approved layouts. Gated community plots, apart from being located far from the city, did not offer much amenities despite their premium prices. Despite the layout being launched officially 3-4 years back, the plots were still in the early stages of being developed.

Trends in Tier-2 Markets

Some Tier-2 cities like Bhopal, Chandigarh, Indore, Jaipur, Mysore etc. are growing rapidly with Metro in terms of job opportunities and infrastructure. These cities provide an ideal location for potential home buyers.

As far as price trends in the top seven cities are concerned, ANAROCK Research indicates that the average property prices in the top 7 cities remained more or less the same as in the pre-Covid period between 2018 and 2019. In 2018, the average prices were 5,551 per sq ft and prices increased by an average of 1% in 2019 5,588 per sq.ft. No change between 2019 and 2020. “Eventually in 2022, we see average prices increasing by 5% on an annual basis; And in the first quarter of 2023, we already see a 5% increase in residential property prices,” said Anuj Puri, chairman, Anarock Group.

From an investment point of view, smaller cities offer a relatively stable property market, which is expected to remain stable even during economic uncertainties. However, it is important to note that there is a dearth of Tier-I developers in smaller cities, which makes it difficult to find reliable brands for properties.

Both metros and smaller cities have their own advantages and disadvantages, and the decision to buy a property should depend on the objective of buying one. Those who work in metros and have long-term job prospects in such cities would do well to buy a home there for their personal use. If they want to buy property purely for investment, they can also consider their home towns, provided the town is developing in terms of physical and social infrastructure. Many Tier II and Tier III cities are witnessing rapid growth, and, as such, have seen a decent increase in property prices, sometimes more than that of metros.

For salaried individuals, buying a home in a tier-II city makes sense only if their work does not tie them to a metro. It is better if the office is located in a metro but remote work offers flexibility.