Nano homes in Mumbai: Worth a try?2 min read . Updated: 02 Jun 2018, 02:12 PM IST
Paying EMIs on an investment is better than rent, but small carpet area may force you to rethink
Mumbai: The demand for nano homes, with a carpet area in the range of 136 to 380 sq. ft, has grown in the past four years, especially in Mumbai. “Housing in Mumbai has become expensive over the years. People still want to buy homes as they need a place to live in. To fulfil that dream, they are switching to micro homes," said Gaurav Panjabi, partner, Raheja Real Estate. In the Mumbai Metropolitan Region alone, 77 nano home projects have been launched since 2013, according to Anarock Property Consultants Pvt Ltd.
These houses offer a carpet area in the range of 136-320 sq. ft. The cost usually ranges between Rs42 lakh and Rs75 lakh. Currently, most micro homes are under construction, with possession expected in the next two to six years. For example, in Chembur in eastern Mumbai, Radius Developers and Deserve Developers are building Anantya near Eastern Freeway. A 230-sq ft apartment in the project costs Rs40 lakh-Rs45 lakh, whereas for a 380-sqft house, you will have to pay Rs70-Rs75 lakh. The project is located 8.6km from Chembur railway station.
In Safal Sai, another project in Chembur near Eastern Freeway and 3km from the nearest railway station, a 270-sqft apartment will cost you Rs65 lakh. In Kandivli, 4km away from the nearest railway station, Ruparel Optima is offering an apartment with a carpet area of 320sqft for Rs54 lakh-Rs60 lakh.
To buy or to rent
“With rising rents in a city like Mumbai, buying a nano home seems to be a suitable option. Taking a small loan and paying EMIs on an investment-grade asset, which can be easily resold, is preferable to paying hefty rents," said Santhosh Kumar, vice chairman, Anarock Property Consultants.
How do you decide whether to buy the apartment or continue staying on rent? To understand the math, we looked at a micro home in an under-construction project at Kandivli priced at Rs60 lakh, whose possession will be granted in four years. If you make a down payment of Rs10 lakh and take a loan of Rs50 lakh at 9% interest rate for a 20-year tenure, your total outgo will be Rs1.08 crore. The current rent rate for a 400 sq. ft carpet area apartment in the same locality is Rs23,000-Rs25,000 a month. You will pay a rent of Rs2.76 lakh a year, with the total rent for 20 years coming to Rs55.20 lakh. This figure is without factoring the rise in rent every year.
According to Magicbrick data, it makes sense to buy only if you plan to stay in the house for 17 years and more. However, the important question is whether you want to live in the neighbourhood for such a long period. Also, factor in other costs such as maintenance fee and travel to workplace. Before buying, consider your long-term plans and see whether the monthly EMI will pinch you.