How Has Climate Change Impacted Home Buying In India?

The diminishing resources, soaring temperature, rising pollution levels- climate change could not get worse. The changing climate has caused the loss of human life and also the infrastructure in cities that have been hit by them. In some cases, the impact has been so high that some of the cities have become temporarily inhabitable, impacting the property markets in such localities.

For instance, the Kerala floods or many cities of Maharashtra that are pronounced drought-affected every year, have now changed the parameters based on which a homebuyer makes a purchase decision. Home buying today is not just about buying in a prime locality but also about buying in a locality that remains relatively unaffected by natural calamities.

In fact, climate change also impacts property prices in a city. “The price of the property is directly proportional to demand, which depends on location. Availability of water during summers and no water-logging in the monsoons, are some of the factors that influence homebuyers' purchasing decisions. If an area faces the problem of water-logging or has a scarcity of water, it negatively affects the price of the property. Also, floods during monsoons have now become a major concern in the cities. Such climatic changes also lead to delay in project completion, in turn inflating the cost of construction,” says José Braganza, joint managing director, B&F Ventures Pvt Ltd.

"When there is excessive pollution in a particular area, it starts impacting the price of the property as well. Indian cities face challenges from population expansion and additionally, climate change starts to depress the price of real estate, especially in flood prone areas. Moreover, disputes over allocation of water and power supply also have enormous impacts," adds K Raheja Corp Senior Vice President Shabbir Kanchawala.

How does urbanisation contribute to climate change?

Rapid urbanisation has been one of the prime contributors to the depleting resources across some of the major cities in India. Reports suggest that it increases air temperatures in cities with increasing population, more automotives and excessive use of natural resources. This increase in temperatures also impacts the health of the citizens.

Kala Seetharam Sridhar, professor and head of Centre for Research in Urban Affairs at Institute for Social and Economic Change says, “Urbanisation caused by the need of ease of mobility to workplaces has led to carbon emission. It is among the many reasons that have led to climate change and also, burden certain cities."

Moreover, the stringent building by-laws that restrict the floor area ratio have made the cities sprawl and not grow taller. This has had an impact on the resources available. “The need is to allow better FAR to developers so that taller buildings can come up and lesser use of land is encouraged to reduce the creating of the concrete jungle,” Sridhar adds.

Where are home buyers shifting?

Proximity to the workplace, to urban cities or metro, is not the prime criteria for many now. Homebuyers are looking for localities where pollution and traffic are less, weather is pleasant and safety is provided. “With ever rising population and pollution, health has become the primary focus of many and climate being the paramount aspect, homebuyers are willing to relocate to the cities which are not densely populated and are offering a better environment and balanced climatic conditions along with adequate work opportunities and a fitting lifestyle,” says Anupam Gupta, group director – sales & marketing, GBP Group.

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Not just customers, Prateek Mittal, director, Sushma Group, adds, “Many of the employees in his company, living in the National Capital Region (NCR) , are shifting their base to Chandigarh, specifically Zirakpur. Better weather, lesser pollution, a drastic reduction in local commuting time and better community living for kids, are the top reasons for them to make a move.”

Homebuyers are also moving away from areas that are prone to natural calamities such as hurricanes, floods, droughts and wildfires. “Homebuyers want to move to areas away from the sea or other water bodies and low-lying areas susceptible to flooding,” adds Braganza.

Infact, some homebuyers are even postponing their homebuying decision due the changing dynamics of a city. "Homebuyers across the country are finding it difficult to access areas that are not prone to flood, pollution or drought. Though the prevailing situation in an area is ideal there is no guarantee that it will remain good enough in the coming years. Thus the impact of this greatly increases the cost of maintaining and reconstructing seriously damagedbuildings. When the monsoons arrive, the city comes to a standstill. As a result of this, homebuyers tend to postpone their property buying decisions, until the period is over. One also sees depreciation in rent, in low-lying and flood-prone areas of Mumbai," says Kanchawala. 

What are home buyers looking for?

Green homes were just a concept in India five years back. However, with growing awareness, people too, are demanding such homes which have eco-friendly features. These homes that are equipped with energy-efficient functionalities ensure that they are not putting too much pressure on the environment and also, not spending too much on the bills. Although such homes could be expensive at the time of purchase, the return on investment is quick, followed by savings.

“Today, consumers are a lot savvier about climate change issues and try to avoid adding to it. They prefer homes that are energy efficient and sustainable. Such homes also provide them with lower operational cost, power supply, efficient use of water, natural ventilation, waste management, and open spaces, improved health and comfort along with sustainability in the long run,” says Braganza.

Not just environment-friendly homes, “While buying a house, the buyers today expect the developers to undertake environment-friendly measures in their projects. Some of the measures include proper systems for waste management, rainwater harvesting, and water treatment plant, etc.,” says LC Mittal, director, Motia Group.