Every product has an expiry date. Why should buildings be any different? A failure to refurbish your houses can have serious repercussions like building collapses, and even the loss of lives, as seen a few times in parts of old Mumbai, where redevelopment hasn’t taken place due to opposition from a few members of the cooperative housing society. The ageing of property impacts its value. It is thus often wise to relocate to a new house following a sell-and-buy process. After a property matures and achieves a certain age, its value stagnates, declines, or at best, appreciates at a diminishing rate. This occurs in most cases. The exceptions are those in posh neighbourhoods where a scarcity of stock puts a floor on the decline of its valuation.
The transacting potential of old properties declines as newer developments come with modern amenities and facilities that weren’t part of older residential enclaves. Even within a locality, it can be observed that the areas that get developed later often boast of better living environs. The resultant divergence in the value of properties can get more acute in times of uncertainty and stagnation. Recent reports of the decline in property values in the National Capital Region have many owners worried. They wonder if they should sell their properties, or stay put and pray for a reversal of trend. Among the worried investors, those in the older regions of the city and the earlier developed pockets of a locality seem more concerned. In Gurgaon, for instance, speculation is rife that the new sectors will gain at the cost of the old.
Buying new homes, of course, comes with its own share of challenges, including delays in project handover. This has been noticed even in projects backed by prestigious builders like the Rahejas in Mumbai and Goldman Sachs (Four Seasons hotel) in Bengaluru. That said, it is clear that there is an improvement in market sentiment and therefore, property sales are set to become easier. There is also an ample stock of completed/near-complete inventory that builders will be happy to liquidate. The season seems ripe for a change of home.
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