The Rs. 10,000/- crore India real estate industries is all set
to grow at a rate of 40% by April 2010, according to builders and international
property consultants. This is owing to the resent dip inpropertyprices in certain metros by 40% to 50%. It has also led to increaseininquiries for affordable properties from 60% in January 2009 to 100%inFebruary-March 2009.
According to Lalit Kumar Jain, President Promoters Builders
Association of Pune (PBAP) and vice-president confederation of Real Estate
Developer’s Associations of India (CREDAI), by April 2010, the ongoing
affordable housing schemes would be sold completely in all metros due to dip in
property prices. Post April 2011, there would be a severe supply crunch. Also,real estate prices wouldrise again as any new construction due to high landprices, infrastructure andservice tax issues. Those who start developmentwould be able to completeprojects only by 2013.
During Q4 2008-09, property prices have come down from Rs 8,000
to Rs 3,500 per sq ft in Kurla, Mumbai. Thane has witnessed a drop from Rs
5,000 to Rs 3,000 per sq ft. Similarly, prices in Virar has nosedived from Rs
3,000 to Rs 1,800 per sq ft. Other cities like Delhi, Bangalore, Pune, Chennai,
too are witnessing increase in inquiries and sales conversion to a limited
extent. According toPawan Malhotra, Managing Director and CEO MahindraLifespaces, there is a 300%increase in enquiries by end buyers. Apart fromdropping prices, what isnecessary is personal negotiation. Everest Builders have sold
about 400 affordable apartments within 48 hours in Thane in February 2009.
There is a requirement of 4-5 lakhs affordable homes in Mumbai, whereas only
40,000 flats are available of which 80- 90% would be sold out by April 2010.
Apart from Mumbai, such as Delhi, Bangalore, Pune, Chennai too would join the
race in selling out most affordable flats by April 2011.
According to industry experts, real estate market currently
contributes only 1.6% to India’s GDP, as compared to 30% as registered during
the financial year 2007-08. Inquiries for properties has started increasing
since February-March 2009 which has lead a fair conversion of flats in
Thane, Bhandup,Vasai, Virar, Dombivali as these localities has
close railway connectivities. Evershine Builders has sold around 400
flats in 48 hours in Thane. Similarly, other leading builders such asAkruti City,Mayfair Housing, Evershine Builders, Lokhandwala Builders haveall set visions of bringing in rising demand that matches supplyof properties as was seen during the financial year 2006- 07.
Lodha Group, India's premier luxury real estate
developers has launched Casa Bella, a leading affordable integrated
township project in Dombivali, targeting the middle class segment. The
township will be spread over 125 acres and Cas a Bella will be built over
40 acres as an integrated residential township with 3,500 residences under
the first phase of development.
There is already a visible and escalating response for
affordable housing Developers will have to increasingly develop the ability to
respond to the current market dynamics rather than follow an obsolete agenda of
business expectations.
Chennai has always been considered as a good resale market for
residential properties. Good value for money, ready-to-occupy status and
locational advantage has always attracted buyers to second-hand flats. Thistrend hasbeen on the rise in recent times. This trend has also brought to lightthevarious issues that come with buying them. A few weeks ago a
resale apartment fair was held by HDFC Ltd. The response to this resale
initiative was very good and more than a thousand properties were on resale and
it is reported that the realtors associated with them are busy closing
the deals.
In the present market conditions, many buyers do not want
to wait for construction of the house. So HDFC brought together the realtors
concerned and facilitated the resale by providing loan facilities.Most of the
buyers wanted property in the city limits in the price range of Rs 50 - 70
lakhs.But properties available for resale in the city limits are in the range
of Rs 1.25 to Rs 2 crores.
The market slowdown has made the task of finding clients for new
and upcoming apartments more difficult for many banks. Tapping the
potential for resale of property has become a necessity for the banks and
buyers may be able to gain from the development. Themerits ofbuying a house on resale include lesser price and location withincity limits.for many banks. Tapping the potential for resale of property
has become a necessity for the banks and buyers may be able to gain from the
development. The merits of buying a house on resale include lesser price
and location within city limits. The demerits of buying such houses are
possible deviation from the approved plan, internal problems among the
members of the residents' association, including legal proceedings
and absence of opportunity for the buyer to assess the quality of construction.
Technical valua- tion of a property on resale normally
calculates depreciation at 1.5 per cent per year. Around 75 percent of properties on resale are 'delinquency flats' The registration chargesare higher for resale apartments as it is decided on the guide- lines value ofthe total property
whereasin a new apartment, the charge is arrived at only basedon the undivided share
of land. Howeverthere were no delin- quency flats among theproperty on resale
during the recentinitiative of HDFC. Brokerscontinue to say that the
market is favouring the buyers. As market prices of new flats are graduallyreducing, price
of resale flats should also follow suit soon. Buyers
analyse the aspects such as location, quality of construction and track
record of the builder in the process of resale. The buyers not showing
interest in properties on resale in outlaying areas.
The majority of buyers showing interest in properties on
resale are end-users and the investors are not opting for purchase of
properties on resale.Many propertieson resale belong to speculators who invested in the property a few yearsago and planned to sell the property at a higher price soon after the con-struction got over. They
wanted to sell the property as quickly as possible fearing
a reduction in the prices. With rentals not increasing to match
the EMI, speculators arefinding it difficult to maintain the property.
No comments:
Post a Comment