Home prices have gone up by close to 5% throughout India’s major 8 cities in the period between January and September, as per several reports. This has been majorly due to an increase in raw material costs (steel and cement) and also increasing housing demand at the same time. If you wish to get more savings on your home purchase, then you may consider purchasing an older house as well.
Older properties are mostly available for sale at lower prices, owing to depreciation. Some experts state that the minimum price difference can be 3-5% for some properties, and increase to a whopping 15-20% in case of many others. Experts also feel that new homes are sometimes at par with older homes in case they are located in highly coveted localities. The difference in pricing is also dependent on the development stage of any new property. With projects coming closer towards completion, the gap comes down. Land is not always present in prime locations for new projects to be built. Then older homes will come at a higher premium as well.
The Founder and Chief Operating Officer at Square Yards, Kanika Gupta Shori, states that older homes are usually built on bigger land parcels, and may offer larger rooms with possibilities for larger yards as well. Buyers can sometimes land great deals with older homes. The stakes of owners often double or even triple in terms of value, in case an older property is redeveloped. Older properties also mean that you buy what you see yourself, something that is not possible with an under-construction unit. Shifting to an older house also means getting tax benefits from the very first home loan EMI itself, thereby equating to higher savings on pre-EMIs at the same time.
However, buyers should watch out for the costs of repairs and renovations, which may eat into the price gains. Kanika Gupta Shori also feels that older homes are more likely to need periodic repairs, while being less energy efficient as well. Banks are often unwilling to sanction loans for buying properties which are quite old as well. One should run some vital checks on older properties before investing in them. Older structures may also sometimes miss contemporary amenities, while not offering suitable parking space at times as well.
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Published Date: Nov 24, 2022
