Indian property buyers are increasingly opting for residential plots post the COVID-19 pandemic. Square Yards has researched this market trend extensively and states that plotted developments saw higher demand steadily throughout 2020. The company has recorded demand increasing by 50% for plotted developments in the last quarter of the calendar year 2020, as compared to the previous quarter between July and September, 2020. Demand has also grown similarly on the YoY (year on year) basis.
More than 65% of inventory of 100+ plots in the Century Greens Phase II project at Bengaluru, were sold out successfully within only 10 days from the pre-launch this February. Shriram Earth is another project in Mysore with 381 plots where the company claims to have just a few plots remaining in their kitty. The first phase of Century Greens was unveiled in September 2018 and was sold out only 3 months post launch. Several organized property firms like Godrej Properties, Shriram Properties, Mahindra Lifespaces, Sobha Developers, Puravankara Developers and Century are foraying into plotted developments with increasing demand.
Why is demand inching higher for residential plots?
Industry experts state that plots were always a coveted proposition although this got a further push from COVID-19, with people realizing the need for more open spaces, versatility of development, the appreciation potential of land as an asset class and the need for low-density projects. Group COO, Housing.com, Makaan.com & PropTiger.com, Mani Rangarajan, states that plots have been first preferences for Indian property buyers although the pandemic has accelerated this trend and it should stay unscathed in the future as well. The versatility of plotted developments and immediate and swift appreciation in land values are key factors. People are more attuned to the fact that values of land never decrease. He further adds that plots are finding higher traction if they are sold by reputed developers with gated communities with the best amenities. Buyers are also taking to plots in fast-growing areas which are witnessing steady infrastructural development.
Founder and COO at Square Yards, Kanika Gupta Shori, echoes the same belief when she adds that plots are better for real estate investments in comparison to apartments or independent homes. The latter have depreciation elements including lack of maintenance over a prolonged duration or dilapidated conditions which may lower the resale value. On the other hand, plots have zero depreciation elements and appreciate swiftly in value, giving the full benefits to buyers. Plotted developments have lower entry size for buyers in terms of capital investment requirements, offer higher returns and a faster appreciation rate as per Shori.
Some things that you should note
Shori states that buyers should undertake thorough due diligence before buying any property and especially plots. Higher due diligence will be needed for plot purchases in comparison to apartments or houses. Paperwork is of the utmost importance and you should check for encumbrance certificate, release certificate if it is a resale plot, title deed, property tax papers and also local approvals according to Shori.
Rangarajan also adds that clear and valid titles are essential along with release certificates from the bank and encumbrance certificates that prove zero outstanding legal dues for any property. Shori also adds that risks still remain from Government acquisition in the future along with illegal encroachment. As a result, checking land use status is very essential before purchasing a plot as per Shori. Risks are automatically lower when plots are being sold by reputed real estate players within gated community projects. Big developers also offer several facilities including club houses, designated green spaces and parks, swimming pools, playing areas for children, convenience stores and a lot more. However, greater caution is recommended before purchasing any plot from a smaller developer or any individual plot owner/seller as per experts.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.