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This one of the most classic questions for buyers or property enthusiasts in Trivandrum real estate market.
The city itself has expanded over the years with new areas like Kazhakuttam coming into picture due to the Technopark development. Traditions will say that land is the best form of real estate investment. We took a deeper dive to really understand if this was true?
Consider that you bought a 40 Lac apartment (which is ready to occupy), 6 Years back in Trivandrum. Going by the statistics and you can read more about appreciation in apartments in this article, the CAGR for apartments in a period of 6 years is considered to be around 20%. Hence after 6 years your 40 Lac apartment is likely to fetch you over Rs.1crore.
Now assume you had the option of buying a parcel of land in an area within the city at the same time, when real estate prices of land were about 2 Lacs per cent. Let us say after 6 years the same land commands about 12 - 15 Lacs per cent. Hence a plot of 20 cents of land which you had bought 6 years back would fetch you about Rs. 2 crore. Here the assumption seems to be valid.
The question that beckons however is if this were not a plot in such a prime residential area and only gave a 2.5X return on value, instead of a 5X return then the cost of the property would be the same i.e Rs. 1 crore for both the apartment and the land. In addition to the property value the apartment would have also given a rental income of about Rs. 1,20,000 * 6 = Rs. 8 Lacs approximately.
Due to lack of availability of good parcels of land within the city where appreciation is the highest, the decision of buying a land or an apartment needs to be taken judiciously. Proper access roads is one of the key factors in this decision and so is the real estate developments if any happening in the area.
Apartments are always a good bet if the property purchase is based on EMIs which could probably be covered by the rental income. A land is a great investment if present in a good locality with proper road access and real estate development.
The city itself has expanded over the years with new areas like Kazhakuttam coming into picture due to the Technopark development. Traditions will say that land is the best form of real estate investment. We took a deeper dive to really understand if this was true?
Consider that you bought a 40 Lac apartment (which is ready to occupy), 6 Years back in Trivandrum. Going by the statistics and you can read more about appreciation in apartments in this article, the CAGR for apartments in a period of 6 years is considered to be around 20%. Hence after 6 years your 40 Lac apartment is likely to fetch you over Rs.1crore.
Now assume you had the option of buying a parcel of land in an area within the city at the same time, when real estate prices of land were about 2 Lacs per cent. Let us say after 6 years the same land commands about 12 - 15 Lacs per cent. Hence a plot of 20 cents of land which you had bought 6 years back would fetch you about Rs. 2 crore. Here the assumption seems to be valid.
The question that beckons however is if this were not a plot in such a prime residential area and only gave a 2.5X return on value, instead of a 5X return then the cost of the property would be the same i.e Rs. 1 crore for both the apartment and the land. In addition to the property value the apartment would have also given a rental income of about Rs. 1,20,000 * 6 = Rs. 8 Lacs approximately.
Due to lack of availability of good parcels of land within the city where appreciation is the highest, the decision of buying a land or an apartment needs to be taken judiciously. Proper access roads is one of the key factors in this decision and so is the real estate developments if any happening in the area.
Apartments are always a good bet if the property purchase is based on EMIs which could probably be covered by the rental income. A land is a great investment if present in a good locality with proper road access and real estate development.
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