Should You Choose a Starter Home Or a Forever Home
– by Anil Pharande, Chairman – Pharande Spaces & President – CREDAI Pune-Metro
Most of the data coming in from research houses and consultants indicate that home-buying sentiment in India has picked up tremendously over the last 2.5 years. This is primarily because, in a pandemic like Covid-19, a home is the most valuable and practical asset to own. This is no longer just about sentiment. A unique aspect of such a pandemic is the safety and security of home. Nobody wants to be at the mercy of a landlord in a situation that involves the wellbeing of one’s family.
When the pandemic started spreading initially, market pundits prophesied that the appetite for homeownership would decrease because people were losing their jobs. Actually, sectors like IT and financial services began booming. As we know, a lot of housing demand in India comes from IT employees. Instead of the predicted doom and gloom scenario, more and more Indians began looking for homes.
Even when site visits were not possible because of the lockdowns, online enquiries were coming in so fast that developers had to improve their technology capabilities to capture and process the increased demand.
Not only has the desire for homeownership increased remarkably since the Covid-19 pandemic, but even the kinds of homes people want to buy have changed. There are good reasons for this.
How Covid-19 Changed Housing Demand
In previous years, there was an apparent separation between workplace and home. This meant that people could manage in smaller homes since the breadwinners and the kids spent a big part of the day in the office and at school. The home was more of a place to relax after spending the day commuting to and from the office and school.
Today, with working from home and studying at home an accepted and even normal way of life, the concepts of work and home have merged into one. Suddenly, many families spend their entire day at home, working, studying and unwinding there. They need bigger homes in better projects that offer them everything they need. Over the last couple of years, you may have noticed that real estate project hoardings and advertisements are highlighting extra space and project-level amenities more than ever before.
Because of the new requirement for best-in-class project amenities, homebuyers started gravitating towards reputed large developers with bigger plots and the know-how and capabilities to create self-contained projects with all the conveniences.
Demand Moves from ‘Starter’ Homes to ‘Forever’ Homes
Before the pandemic, many Indians thought of homeownership as a journey, not a destination. The journey began with buying a small ‘starter’ home, usually when a young couple has just married and not started a family as yet. As incomes and family grew, they could upgrade to a larger home in a better location. A ‘forever’ home could eventually replace this new home.
Today, amidst all the uncertainties, people no longer want to embark on such a journey; they want to secure the ultimate destination now. They are looking for ‘forever’ homes.
What is a Forever Home?
A forever home is one where you can live indefinitely without worrying about upgrading and shifting in the future. While a starter home will be small and with basic features, in a project with minimal amenities and facilities, a forever home is ‘future-proof’. It has enough space for the family to live, work, and study in, has the best features available, and is in a project that has foreseen all the current and future requirements.
Starter homes tend to be in smaller projects built in far suburbs with few conveniences. Forever homes are in large townships that have been created to offer a holistic lifestyle. While most people will endure inconveniences and lack of infrastructure when they buy a starter home, they expect their forever homes to be in well-developed projects with green open spaces.
A forever home must be the most convenient to live in. Everything needed for a comfortable and convenient life must be available close by. It must offer 24-hour water and electricity supply, top-grade security, and good connectivity to other parts of the city.
The neighbourhood is suitable for forging lasting relationships and integrating fully into the community. Children can make friends and engage in healthy physical activity in spaces and playgrounds created explicitly for this purpose. They can grow up with a feeling of security, space and freedom. The same is true for elders in the family.
A forever home is not just about size – it is about having a rewarding experience for many years.
Can You Afford a Forever Home?
Since a forever home is the best home you will ever live in, will it not be very costly? If you are still young and at the early stage of your career, will a starter home not make more sense? That depends. Bear in mind that as your income grows, so will property prices. Your forever home, wherever it is, will not be cheaper ten or fifteen years down the line.
A forever home does not have to be in a central location. In fact, upcoming locations are a better investment bet since they will see better price appreciation than established core areas. While your forever home must be in a well-connected area, it does not have to be in the middle of the city. You may want to consider a township property because integrated townships provide all the comforts of inner-city life within their premises.
Integrated townships require a lot of land, so they are usually developed in extended suburban areas. This means that property prices are lower than in the central city. You want future-proofed comfort and convenience, which make township properties ideal forever homes.
A lot of Indians are deciding on buying their forever homes today. After all the uncertainty of the pandemic, what they want is the security of knowing that the house-hunting journey is over. With smart choices, this decision need not be an undue financial strain.
However, as observed by various real estate stakeholders and agencies, residential real estate prices, which had remained stagnant for 3-4 years, will now increase by between 5-10% because of the increased cost of construction as well as improved demand. Ultimately, a forever home is the destination we all want to reach – and there is no better time than the present.