What is the lifespan of an apartment in India? Is investing in older apartment a better option than investing in a new apartment?
The National Building Code (NBC) released by the Indian government and compiled by most experienced architects in the nation, regulates all building construction activities in India. The construction standards vary from state to state and city to city depending on the State building codes but shall refer to NBC, which is considered as national standards for buildings.
With advanced technology in the construction sector, the standards have gotten better and quality of construction is more indelible than the 1900's. The life span of a concrete structure is about 75–100 years, the average life span of an apartment is 50–60 years and a house is average 40 years. Although Eco-friendly and green constructions have a longer life span, minimal maintenance can help increase the life span of any building. With minimal maintenance, the building can still look and feel newer and have less depreciation value can fetch a good market value, if the location is in a prime area, close proximity to bus, train stations and to the city centre.
Now coming to resale value or buying an apartment that has run its course of time or inhabitable, what will it fetch as its value? Is there a resale value for an apartment that is not habitable?
Two scenarios run across my mind, one of the building quality, with its normal wear and tear after its life span, would fetch a value only because of its location, close proximity to desired amenities and quiet neighbourhood. The second scenario would be the depreciation that the building will see during its life span.
The third scenario would be the outdated materials and styles an older apartment would fetch a lower value, having room for remodelling in the near future. This being said, the value would again be for the location, close proximity to schools, colleges, hospitals and public transportation.
In conclusion, a new apartment with a price tag of 50 lakh rupees, with a 20% down payment and a loan with the bank at an average 8.5% interest rate for 20 years will end up with a price paid of over a crore rupees in total.
While an apartment that has run its time span of 50–60 years, keep in mind the land value never depreciates, it appreciates and location can alter the value of the depreciated property, depreciation is calculated as a factor, which is the total value of the property with its age of construction, depreciation factor is valid only for the construction and not the land, land value will be bench marked to the market value .
When you buy an apartment, you are also getting an appreciated value of the land and the depreciated value of the building construction with its usual wear and tear as outdated fittings, style and interior works. This may appear as high market value for some resale apartments than their buying cost originally.
For your information
How to calculate the depreciation value of a property?
The average life span of a building is about 60 years. The depreciation value can be computed by taking out the ratio of years of construction and total age of the building
For example, if a building is sold after 20 years of its construction, the ratio would be 20:60 = 1: 3, the remainder age of the property is the true value of it, to this add the current market value of the land
to get an approximate value of the property.
Keep in mind, the depreciation value will not count, if the property is in a high demand neighbourhood and there are limited properties on sale in that area.
It’s not just an apartment, it’s home- MARSMOUNT
Marsmount builders are a pioneer in building apartments around Bangalore area since 2005. Our property situated in Hoskerehalli is one of our proud achievement with its 124 units and amenities is attracting many first time home owners.
Our property at Uttarahalli is within a proximity and is another proud venture , which is completed and regarded as one of esteemed properties so far. Marsmount after looking into the demographics of Bengaluru, the areas that are now a popular suburbs cost more and getting crowded , thought to explore into extended areas like Uttarahalli and Hosakerehalli which falls in the south eastern part of Bengaluru.
Hope this article was helpful to start thinking your option of the new or older apartment to invest in the near future.
