In the wake of the Covid-19 pandemic, plotted developments have garnered significant attention as many Indians consider this option over investing in built-up homes. Several factors influence such preferences, including availability of land, infrastructure development, cultural inclination towards low-rise homes, investment considerations, and affordability.
To begin with, it is important to consider the cost of a plot of land suitable for residential development, commonly known as non-agricultural (NA) land or plotted development. The size of land required to build a home varies based on the desired specifications. For example, a small 2-bedroom bungalow may need 600-800 square yards, while a spacious 4-5 bedroom luxury bungalow may require 1200-1500 square yards. In prime urban areas, where land availability is limited, a decent-sized bungalow can be built on 400-600 square yards. In suburban areas or smaller towns, 800-1000+ square yards would be considered adequate.
The cost of plots varies depending on the location. In Mumbai, plots of 100-300 square yards in areas like Thane, Navi Mumbai, Vasai-Virar, and Panvel can range from Rs. 60,000 to 90,000 per square yard. In Pune, residential plot sizes typically range from 150 to 400 square yards, with prices ranging from Rs. 5,000 to 12,000 per square yard, depending on the location within the city.
However, the cost of the land is just the beginning. The next major expense is the cost of building a home on the plot. According to a 2022 report by Anarock Property Consultants, the average cost to construct a 2,000 square feet standalone home in India is around Rs. 3,000-3,500 per square foot, totaling an outlay of Rs. 60-70 lakh. In contrast, a 2BHK apartment in many major Indian cities averages Rs. 80-90 lakh, while 3BHK units average Rs. 1-1.1 crores.
In terms of upfront savings, built-up apartments offer a significant advantage over acquiring and building on a plot. However, those who purchase plots often focus on capital appreciation, which is a key feature of land investment. According to a 2022 report by PropTiger, land appreciation in non-metro tier-2 and tier-3 cities over the past decade has been significant, ranging from 100-150% compared to 50-75% in metros. While apartments may be more cost-effective, land value growth can potentially recoup the initial cost of a plot over the long term.
Apart from potential investment returns, buying a plot and building a home offers the advantage of customization. Homeowners can design and personalize their property according to their preferences, incorporating layout, finishing, design elements, landscaping, and other features that match their lifestyle.
On the other hand, built-up properties like apartments have certain limitations when it comes to customization. As architect Rahul Kadri aptly stated, “Personalization gives a character to the space. This is only possible when one builds a home from scratch.” According to Anarock data, custom homes represented 73% of new residential construction in 2021, indicating a strong preference for personalized living spaces.
However, with the advent of the post-pandemic era, community living has gained prominence. For many working professionals and nuclear families in India, the sense of neighborhood, belonging, and health-focused amenities became important considerations. Modern townships, especially those developed by reputable builders, provide superior amenities and conveniences that may not be feasible to replicate in a self-developed home. Townships offer facilities such as swimming pools, gyms, sports courts, walking trails, jogging tracks, children’s play areas, and clubhouses. Additionally, maintenance is covered through association fees, relieving homeowners of individual upkeep costs. Townships and gated communities also provide enhanced security compared to standalone homes.
When considering housing prices growth, both land and apartments have shown appreciation. Various real estate consultancies estimate the average price increase in leading Indian cities to be between 5-18% over the past three years. The RBI’s All-India Home Price Index indicates a rise of almost 10% in the last three years. Moreover, housing prices have continued to increase, with a 4.57% rise between March 2022 and March 2023, suggesting ongoing price appreciation in metros.
Final Words, while plotted developments offer customization and potential land appreciation, modern townships and built-up apartments provide the convenience of plug-and-play homes, superior amenities, and a sense of community living. The choice between a plot and a flat depends on individual preferences, financial means, investment goals, and the importance given to personalization, convenience, and community living.
