Project:Sakshi mension, Unit: 3BHK, Type of property:Apartment:Amenities: lift power back up security, car park, rain water harvesting,gym,vastu compliant swimming pool servent wuarters, Location:Banaswadi, PostedBy:Sakshi Developers
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 in propertyprices in certain metros by 40% to 50%. It has also led to increase ininquiries 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 would rise again as any new construction due to high landprices, infrastructure and service tax issues. Those who start developmentwould be able to complete projects 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 to Pawan Malhotra, Managing Director and CEO MahindraLifespaces, there is a 300% increase in enquiries by end buyers. Apart fromdropping prices, what is necessary 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 as Akruti City, Mayfair Housing, Evershine Builders, Lokhandwala Builders have all set visions of bringing in rising demand that matches supply of 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 has been on the rise in recent times. This trend has also brought to lightthe various 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 of buying 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 per cent of properties on resale are 'delinquency flats' The registration charges are higher for resale apartments as it is decided on the guide- lines value of the 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. Brokers continue to say that the market is favouring the buyers. As market prices of new flats are gradually reducing, 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 properties on resale belong to speculators who invested in the property a few years ago 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 are finding it difficult to maintain the property.