Why Are Apartments On Higher Floors Expensive?

In India, when buying a house floor or level of a residential unit remains a crucial decisive factor for homebuyers. Nevertheless, many homebuyers believe that the apartments on higher floors command a premium than the flats on lower floors. However, such is not the case. The value of apartments on higher floors may increase or decrease across locations depending on the climatic conditions and the project surroundings.

The escalating population in metro cities against limited land supply has compelled real estate developers to focus on vertical expansion to recover the elevated construction costs. Resultantly, high-rise structures have become the fashion and create craze among the property buyers. While this helps developers to build more units on a small land parcel, homebuyers enjoy uninterrupted city views.

But, does this imply that apartments on higher floors are more expensive! Not necessarily. The value of apartments for sale on higher floors may increase or decrease as per the location of the project. The topography of the area, climatic conditions and the project surroundings influence the value of apartments on higher floors.

Delhi

In Delhi, the apartment culture is not as prevalent as in Mumbai. Here people majorly prefer independent houses or G+3 or G+4 builder floors. This psychological make-up is motivated by the fact that earthquakes frequently shake Delhi. Moreover, with commercial development being vast spread to areas in Central Delhi, Gurgaon and Noida, Delhi has not felt the space crunch that would force it to go vertical. Availability of land parcels at competitive prices, especially in comparison to Mumbai, has shaped housing demand traditionally in favour of independent residential houses for sale and builder floors.

Also, Delhi experiences a continental climate which makes summers unbearably hot. Since the lower floor units are flanked by buildings on both sides, the sunlight perforation, especially in the afternoon, is less as against the upper floor units. This way, a ground floor unit remains cooler during summers, reducing the dependence on Air Conditioners (ACs), and thereby the utility bills.

Another factor is that lower floors command better rental returns because Indians in general and Delhites, in particular, prefer to live closer to the ground. This demand has led developers to charge a 5-10 percent premium for lower-floor apartments compared to high-rise developments.

Mumbai

Mumbai is India’s high-rise capital, as land is scarce and expensive, and expansion can only be accomplished vertically. For Mumbaikars, living on the top floor has its charm. The higher you g, the higher prices of the homes for sale will be. The beautiful views of the surrounding sea and beaches are enchanting and render peace amidst the bustling city life. Hence, developers in Mumbai levy higher floor charges and Preferential Location Charges (PLC).

Mumbai’s streets are congested and noisy, and living on the lower floors might not offer much privacy, provided its vast population. The majority of home buyers prefer higher floors to avoid external noise. Security is also a major concern as ground floor units or apartments on lower floors pose a higher risk of burglary. While it also depends on the security measures implemented by the management of the residential society, buyers generally avoid lower floor units to avoid threats.

Mumbai’s climate, characterised by recurring rains, is another factor. The ground floor units are usually poorly ventilated, suffer from flooding during monsoons and face intrusions by insects and mosquitoes. Moreover, as the ground remains moist, the ambient humidity and latent heat levels are high.

Both Mumbai and Delhi, as it is known, are the prime real estate destinations in India. In Mumbai, higher floors command more value as builders levy preferential location charges for unrestricted views of the city and the cool breeze.

As for Delhi, the lower floors are more expensive as the demand for lower floors is high. Although, some of the high-rise projects in South Delhi and Gurgaon are now charging PLCs on higher floors and penthouses as the demand for upper floors is increasing.

Another factor that is common for both the cities is that higher floors in most residential projects are converted into penthouses and luxury condominiums, which undoubtedly command a premium over lower floors.

Unit prices are also dependent on the preferential location with respect to sea view, landscape view, garden view or even swimming pool view in some cases. Thus, the final cost of an apartment for sale may be a function of several elements, and not alone the level of the floor.