Majority of Indians look forward to buying an affordable house. The government has initiated so many schemes to push affordable housing. All major state housing agencies are coming up with affordable housing schemes. For eg. Delhi Development Authority (DDA) launched LIG and EWS flats in Delhi in 2014 and is coming up with another draw in 2017. In Haryana and Uttar Pradesh, government is collaborating with private sector to launch various affordable housing projects.
Now that Real Estate prices have corrected, many private builders are also launching smaller units at affordable prices.
For a common man, it becomes difficult to make a choice between a government housing project and a private builder flat. In this article, I will try to highlight various points that you should consider before applying for a government housing project or a private builder flat.
- Location – Irrespective of whether it is a Government housing project or a Private builder flat, you should invest in the location. You should consider various aspects like proximity to schools, colleges, transportation, markets etc. Ultimately you will live there and even if you plan to rent it out, any tenant would look at all these aspects that make the property livable. Moreover, you should buy a house in such a location where you can easily manage it.
- Budget – Once you have decided your priority locations. Next step is to calculate your home affordability. You should compare all government housing projects and private builder projects in your preferred location and choose the one which comes in your budget.
- Development in the Area – A government housing project would generally have all basic facilities like proper planned roads, sewerage system, electrical wiring & ducting, water system, boundary wall and gated compound etc. whereas some private builder projects may have these facilities and others may not have proper development in the area. For eg. Builder floors built in unauthorized or unregulated colonies may not have wide roads, proper sewerage system, gated compound etc.
- Security – Security is a very important aspect that you should consider while buying your dream home. As discussed in the above point, many private builder projects do not provide gated compounds. That can be a big security concern and you should keep that point in mind before you book such a flat.
- Ownership – Many government housing schemes provide option of leasehold and freehold basis. Similarly, private builders flats may also transfer ownership via proper Sale Deed or via General Power of Attorney (GPA). Although, all these are various forms of title transfers, your first preference should be to go for a proper freehold property where you get a Sale Deed or Conveyance deed registered in your name. Only, then you will have absolute title of property in your name. You should consider other forms of title transfers only if you have some other constraints like location, budget etc.
- Home Loan – If you are not planning to buy your house in all cash, home loan is another aspect that you should consider before buying a home. You can easily get a home loan on a government housing project whereas in case of private builder project, you should check from the builder whether he has a tie-up with a couple of Banks for home loans. You can also apply for a pre-approved home loan in case you want to be sure.
- Lucky Draw – Most government housing projects have lucky draw system for the allotment of houses in a scheme. So, you have to apply for such schemes in advance. Whereas, you can book a private builder flat on a first come first serve basis. So, in case you miss a government housing project, you can either wait for the next scheme or book a private builder flat if you find a reasonable deal.
- Possession – Whether you book a government housing project or a private builder flat, possession should be one of the top priorities in your list. In the past, many private builders have failed to offer possession on time. So, you should check the reputation and past record of the builder before you apply for a private builder flat. On the other hand, you can reasonably sure that you will get a government housing project on time. In any case, a ready to move property is always better than an under construction property.
I hope that you found this article useful and you can make better decision while choosing between a government housing flat and a private builder flat.
About the Author
Mukul Malik is a Real Estate Entrepreneur who likes writing about Real Estate, Finance and Digital Marketing. He runs a popular Real Estate Blog assetyogi.com and lives in New Delhi, India.