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IREF® - Indian Real Estate Forum > Real Estate in India > Real Estate Chennai > Villas - Pros and Cons
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Old July 31 2012, 11:40 PM   #1
k11 is offline k11
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Default All about Villas

I wanted to start a thread on Villa project discussions. I have never found answers. There is a huge demand for them and are generally associated with big bucks as there a land component involved.

I am a fan of Apt and not Independent houses unless they are in really big plot. Villas are like hybrid of both Apts and Independent Houses. Big selling point is club houses, landscaping, common maintainance/upkeep and of course they look great.

Below are my views please add your comments and feel free to correct me if I am wrong.

1. Can Villas have exterior alterations.
As far as I know, Villas cannot be extended without the association permits. However interior alterations are possible. Also Max FSI would have already been exploited by developer.

2. Is the land under a Villa freehold or is it like UDS of an Apt.
As exterior changes are prohibited. It is similar like UDS, redevelopment is when this becomes key. I agree the valuation of villa will have this land component will make up most of the value

3. How are Villas valued? Why do some builder charge per sqft for super-builtup?
I haven't been able to figure out why can't every developer put a land cost + construction cost. Some developers do this.
But most of them do a superficial cost per built-up, which makes it harder to calculate for common public.
I am not saying they should split the cost, but alteast specify a round figure like 2.15C and not 6500/sqft.

4. Why do Villas have only 1 car park?
This is the biggest mystery to me. A Villa on outskirts sometimes costs 2C and goes up to 4-5C sometimes.
How come people living in these have only one car living so far from city.
I see people in 2-bhk apts in city, where there is a public transport having 2 cars.

5. Who owns the club house? Is there an UDS for it.
Some projects have club house ownership so developers tack on a UDS also and include the club house sqft in the built-up. It is a bigger % in smaller project. But I think it is fair as you also own a bigger % of clubhouse.

6. Are roads part of land component/UDS in Villa?
Never, when you buy a plot they do not charge you for roads given to municipality. Layout developers make up this in margin.
Similarly, public roads should not be included.


Will add more to this.....

 
Old August 1 2012, 12:18 AM   #2
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Not to hijack the thread, but I feel Villas are over rated, mainly because it seems to be more expensive than buying a plot and constructing an independent house.

Of course its a just a personal preference as I don't care much about things like club house,pools etc - I dont know how much of them will be really usable - it's nice to see them on brochures but its shared across so many people or wont be available most of the times - then why pay the price for it? Paying the price for "parks" and "roads" or other common areas is even more outrageous.

I would much rather buy my own plot, construct, have my own backyard(which I can use as a club house, although its not fancy), 2 car park and have a small private pool in upper deck. Haven't done the math, but for same locality I would guess this would work out much cheaper. Of course maintenance is not easy compared to being in a community.

Again, just stating my personal thoughts and I'm pursuing neither options
 
Old August 1 2012, 02:08 AM   #3
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I created the thread to hear different opinions so feel free to comment.


Villas vs Indep Houses

In my view, if you have land in a nice area, then it is fine. If you do not, Villas are good. Personally, I like Apts over other types of housing.

But not all people can afford land in nice areas.
You can make your house nice, but it is difficult to convince your neighbor or make your surroundings good. In outskirts, you do not have choice. You got to stay in gated communities.

With gated communities you are buying the surroundings too and staying with like minded people. Villa prices will always have this incremental expense and is justified. Of course, there is a limit to it.

How I would value a Villa?
Like one ground of land parcel from a Villa could be 20-50% higher than the value of freehold land on the same road. This is to justify additional developmental costs and opportunity cost. Closer to city 20% premium, farther off greater premium.
Same thing with construction costs too, I will allow builder margin of 40-50%. If the construction cost is 1400, I will estimate at 2000 and upwards.

Again 5L-20L for builder profit depending on the type of project, on top of construction and land premium. But the buck stops there. I would not advice people to pay anything more than that.

Villas will always be more expensive than Indep Houses. It is the same old questions - Flats vs Houses. You also get better value in terms of better surroundings, neighbors, look & feel, security, landscaped gardens, uniform layout, amenities, shared maintainance, etc.
 
Old August 1 2012, 04:27 AM   #4
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Quote:
Originally Posted by k11 View Post
You also get better value in terms of better surroundings, neighbors, look & feel, security, landscaped gardens, uniform layout, amenities, shared maintainance, etc.
Yeah, I agree. I think staying with like minded people or having neighbors is a big factor, where villas are hands down better than indep houses. In indep houses(esp in suburbs), you might be probably surrounded by poor facilities and lower gentry people(not that there is anything bad with it, but in reality many people may not prefer that)

But independent houses do have advantages like building to your own comfort,having more privacy and using amenities when needed and not when it is available. I think one thing that is really missing in apts (and villas) is not having a garden(personally don't feel community's landscape can be a substitue for that). On the surface, there might seem lots of -ves with indep houses(since locality,gentry and amenities is all easier to notice) but once you start living in, comfort,privacy and space starts to matter more than this, is what I believe. Just my 2c.
 
Old August 1 2012, 07:01 AM   #5
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Check my reply in bold

Quote:
Originally Posted by k11 View Post
I wanted to start a thread on Villa project discussions. I have never found answers. There is a huge demand for them and are generally associated with big bucks as there a land component involved.

"WITH THE EXCEPTION OF ECR....."

builders normally go for villa projects when the land is in interior location and apartments won't sell. If villas are also not viable, they'll plot it out and sell. Normally in big projects, the promoter will plot out a portion of their land holding, once they generate sufficient interest in the locality, they'll start developing villas and next phase will be apartment development. Unitech Nallambakkam township and Sobha Harishree gardens Coimbatore are classic examples.

The kind of location villas these days are coming up are very scary, check out the route to Grand Ellora villa:


OMR Grand Ellora Villa Route Video.mp4 - YouTube

Villas are not silver bullets, guaranteed to appreciate. ETA Le Chalet has seen zero to negligible appreciation in the last 3 years while apartment projects launched around same time but in different locations have appreciated leaps and bounds.

I am a fan of Apt and not Independent houses unless they are in really big plot. Villas are like hybrid of both Apts and Independent Houses. Big selling point is club houses, landscaping, common maintainance/upkeep and of course they look great.

Below are my views please add your comments and feel free to correct me if I am wrong.

1. Can Villas have exterior alterations.
As far as I know, Villas cannot be extended without the association permits. However interior alterations are possible. Also Max FSI would have already been exploited by developer.

Some villas are marketed as expandable (Eg. SARE villas in GST).

2. Is the land under a Villa freehold or is it like UDS of an Apt.
As exterior changes are prohibited. It is similar like UDS, redevelopment is when this becomes key. I agree the valuation of villa will have this land component will make up most of the value

In Le Chalet, some standalone villa units are sold with freehold land share while others are sold with UDS.

3. How are Villas valued? Why do some builder charge per sqft for super-builtup?
I haven't been able to figure out why can't every developer put a land cost + construction cost. Some developers do this.
But most of them do a superficial cost per built-up, which makes it harder to calculate for common public.
I am not saying they should split the cost, but alteast specify a round figure like 2.15C and not 6500/sqft.

The concept of pricing has evolved a lot, it is not sum of raw material+labor+profit margin anymore. This analogy can be applied to consumer goods as well, when we buy an item, we are not provided details of manufacturing and raw material costs due to business complexity. Real estate is becoming a consumable commodity, even in apartments we can see tiered pricing (eg. pool facing, sea facing, higher floor).

4. Why do Villas have only 1 car park?
This is the biggest mystery to me. A Villa on outskirts sometimes costs 2C and goes up to 4-5C sometimes.
How come people living in these have only one car living so far from city.
I see people in 2-bhk apts in city, where there is a public transport having 2 cars.



5. Who owns the club house? Is there an UDS for it.
Some projects have club house ownership so developers tack on a UDS also and include the club house sqft in the built-up. It is a bigger % in smaller project. But I think it is fair as you also own a bigger % of clubhouse.

6. Are roads part of land component/UDS in Villa?
Never, when you buy a plot they do not charge you for roads given to municipality. Layout developers make up this in margin.
Similarly, public roads should not be included.

Roads are normally gifted to local panchayat or municipal body, there is one particular villa in ECR called Ferns (can't remember the name exactly) where the community retains ownership of roads. This is the first attempt of a real gated community concept in Chennai. There was an article about this community in Hindu property plus a few months back.

Will add more to this.....
 
Old August 1 2012, 07:24 AM   #6
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The above is not applicable for ECR villas, most of us will not even be aware of the poshest of the posh villas coming up on ECR as these are not mass marketed.
 
Old August 1 2012, 07:55 AM   #7
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Wow, your youtube video was indeed shows the reality.

Not sure how they decide to come up with the project in such locations.
 
Old August 1 2012, 08:05 AM   #8
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compare the youtube to thier promo video,
Untitled on Vimeo
LOL
The guy's accent is pretty funny
 
Old August 1 2012, 08:17 AM   #9
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This is the reality of villa projects coming up all over chennai with the exception of beach facing ones. Can't blame the builders, because they are just tapping our simplistic linear view of real estate that villas are better than independent houses which are better than luxury apartments which are better than normal apartments.
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Old August 1 2012, 08:39 AM   #10
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The article I mentioned about "Ferns", first group housing project in Chennai:

The Hindu : FEATURES / PROPERTY PLUS : The road to group housing
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