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Builder floors vs. High Rise Apartments

In modern environment innovative options both in the residential units and loan offerings seem to be the need of the hour. The boom in real estate that has been fueled by the ever rising incomes of individuals in India combined with easy access to home loans has brought about such new and innovative options in the residential units. Luxury and lifestyle demand has seen the emergence of elegant builder floors as the preferred choice among many upwardly mobile Indians. This concept of building a three or four level high building over small or medium sized residential plot and then selling each of the floors to independent buyers is gaining rapid popularity in the metros as well as tier II cities across the country. The builder floors can be developed either by established builder, individual land owners or as joint venture of both the parties.

Basic Differences between Builder Floors and High Rise Apartments:

There are several differences in the basic considerations of builder floors as compared to apartments in high rise buildings.

Builder floors are low rise buildings with generally 4 floors or less whereas the high rise residential projects may have a large number of floors depending on the project clearances.
In the builder floors only a single dwelling unit is provided per floor which implies that a single family has the entire floor to itself providing greater privacy. The high rise projects on the other hand have a number of 2, 3 or 4 BHK apartments on a single floor which implies more people sharing the same floor.

The cost of builder floors are inherently higher as they cater to high end customers who prefer to enjoy better amenities and privacy at a higher cost. The high rise residential complexes cater to the average middle class who require budget housing solution with a ready to move in option. Economically speaking the apartments in high rise buildings are much more efficient in terms of cost as well as utilization of available space.

High rise complexes with more number of units will generally have more common amenities such as swimming pools, community halls, club houses and children’s park. The social life is also more inclusive in case of the high rise apartments as more families reside in the same building.

Key Benefits of Builder Floors:

The USP of builder floors is that it allows one to own an independent dwelling unit without having to pay hefty amounts required for independent villas or bungalows. The price difference between an independent villa and the builder floor makes it a lucrative option for all those who want better lifestyle at limited costs. Along with the privacy and luxury of an entire floor to you also comes the freedom from paying maintenance fees and other charges commonly applicable in high rise apartment. The builder floors accord one the freedom to choose the locality of the house in more developed areas of the city. Tying up with independent land or house owners for developing builder floor can work out to be a great deal for buyers. There is a better opportunity for friends or like minded people getting together and buying all the floors of the building so as to have a separate community that will not be disturbed by outsiders as is the case in high rise buildings that have a large number of apartments. Each floor has its own separate water and electricity connection which helps avoid disputes or misunderstandings which are common in larger communities where floors are shared by many families. Additionally the returns that can be expected from the sale of builder floors are much higher in terms of sheer percentages as the entire floor is being disposed at a time. A higher premium on the property is naturally expected as the new owner gets independence along with luxury.

Common Problems Faced by Builder Floor Owners:

Along with the luxury of owning a builder floor there are a few associated problems which have to be catered for by the owner all by himself. The first among these is the maintenance activities which are taken care by the society in larger residential complexes have now to be undertaken by the owner himself. Additionally community facilities which are commonly available in larger societies will be absent in most of the builder floors as only a few families will be sharing the entire complex. The quality of construction may not be as good as in the other case. Hence the due diligence and supervision has to be carried out by the owner if required with the help of a hired professional.

Essential Checks while Buying Builder Floors:

While buying any kind of real estate requires the customer to do a few fundamental checks, the situation becomes even more critical and essential in case of builder floors as only a few customers are involved. Mentioned below are some of the important checks that must be carried out prior to buying a builder floor.

The past record as well reputation of the developer or land owner must be verified carefully in terms of quality as well as commitment to schedules.

The title of the property has to be individually verified at the local courts or land record offices.
Check out the market rates applicable in that circle or the base rate fixed by the local authority.
Consult and discuss with a number of builders, brokers and individual land owners before making up your mind.

The builder floors promise to provide lifestyle and luxury at an affordable price. However there are a few inherent risks associated, which can be catered for through a bit of research and careful planning.

Property Forecast 2014 (Till Dec.2013 Report)

The year 2013 was an eventful year for the Indian Real Estate sector with the introduction of Real Estate Regulatory Bill and Land Acquisition Bill in the parliament. On the home buyers’ side, the year can be best described as a lackluster year with high property prices and home loan interest rates that kept the buyers waiting on the sidelines.

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As we move into 2014, it is important to gauge the mood of home buyers in terms of their desire, aspirations and fears from the upcoming year. For this purpose, we i.e. India’s fastest growing property site, conducted a research, “Property Research 2014” (Please ask for our news paper on property ishnoida@gmail.com). The research is started in January 2013 among (approx.) 5000 home/office buyers across Mumbai, Delhi NCR, Bangalore, Chennai, Hyderabad, Pune, Kolkata, Ahmedabad, Chandigarh, Indore and more. The main highlights of the research:

Property market (Residential) in 2014 will be driven by end users:
Speculators and Investors have been riding the property market since a long time; however, they will make way for end users in 2014. Majority of home buyers want to purchase a property in 2014 for self use as they are currently staying on rent. An almost equal number of home buyers want to buy property to meet the growing family requirements and for long term investment. The analysis show that the year 2014 may experience a very positive shift from the earlier years and will bring in the much required stability in the property market. As the property transactions have fallen over the past 12 months, speculators and investors are finding it difficult to exit the market.
Residential property prices will either stabilize or will appreciate marginally in 2014:

Property prices have remained stable over the past few months and the mood of the market suggests a continuation of this trend. 26% of home buyers feel that the residential property prices would remain stable over the course of 2014. 46% of buyers expect the prices to go up from the current level with majority of them expecting an appreciation of up to 10%. This should bring some relief to the buyers in 2014 as generally more than 10% appreciation is expected on a yearly basis. 28% of buyers are advocating for the prices to go down from the current level. 17% of them are expecting a drop of over 10%.
Property budget of Home Buyers is likely to remain the same in 2014:

There has been talk of a slowdown in the Indian economy with all economic indicators showing a negative trend. This, however, has not dampened the spirit of the Indian home buyer. His budget for buying a property in 2014 will not be affected by the slowdown. This reinforces the confidence of the home buyer in real estate as an asset class. There are 23% of buyers who have reduced their budget allocation while there are another 19% who are ready to dish out more money for property buying.
Apartment is the preferred choice of home buyers:
In 2014, majority (65%) of home buyers will be looking for apartments or flats. Residential plots (15%) also emerged as the preferred choice for a few home buyers. Apartment is the preferred choice for people in Delhi, Mumbai & other such cities that have high property prices and scarcity of land. Security and community living also contribute in making apartment the preferred option. Service /Studio apartment have gained popularity; however, they still account for a very small portion (3%) of the overall demand. There is an interesting overall shift in the property type preference; a decade back or so, quite a lot of the people preferred an independent/builder floor; however, now the preference for the same remains only 4%.

Aditya Verma (Works at Makaan.com) says: "2014 is likely to be a great year for genuine property seekers. The property prices are likely to move in a narrow range and money will be KING. If home buyers have the money, they will be able to drive a hard bargain in coming year. It may not be a good year for investors and speculators as exiting in 12 - 18 months may be difficult".

Jiten Malkan (Manager at Siddhi Auto) says: "I don't think any significant growth in residential property price. I think investor should shift to residential to commercial property where i see the very good ROI".

Rahul Khanna (Reader - New Delhi, India) says: "Actual trend would be known after the election results and formation of a stable govt.If stable govt.is formed there would be better investment sentiment thereby driving the economy and real estate sector in general.For genuine home seekers hard bargaining always works so whenever one has money its the right time to buy irrespective of market scenario.Furthermore there should be further drop in floor prices in delhi as DDA approved new zones have come up hence adding more than 1.5 lakh acre of land bank to already existing delhi".