However, after the correction, buyers, who were waiting for lowering of prices, realised that the market had stabilised and was not likely to go down further. They were now coming back into the market with renewed interest, he said. Significantly, due to good supply, buyers have the choice to select a property of choice, that too in a project that is at an advanced stage of construction instead of investing in just a coming up venture or one that is in a proposal stage.
The Chief Executive Officer of Cybercity Builders and Developers, Mr Uttam Korupolu, told Business Line that the market now reflects a positive mood with buyers looking at projects that are attractively priced. Citing the company’s project near Hitech City, wherein apartments are priced at Rs 2,500 per sq.ft in gated community environs, Mr Uttam said that in barely months of launching the project, all the 400 apartments have been booked. This is because projects of similar nature were earlier priced anywhere between Rs 3,500 and 4,000 per sq.ft. Buyers now see value in such properties and are able to relate to them.
They also know that the market has found its bottom, he explained. “Interaction with some of the buyers shows that nearly 25 per cent of those who had booked their properties are actually speculating in the hope that the market will again find its way up,” Referring to the pattern in the core city area, Mr Prabhakar Rao said that the cost per sq.ft now at about Rs 3,000 to Rs 4,000 per sq.ft depending upon the location of the property and the stage of development.
In fact, these were ruling 30-40 per cent higher about 18 months ago. Significantly, small developers who have five floors of built-up structures and relatively fewer number of apartments compared with high-rise projects in the city, are not budging on prices as they have less exposure to loans. It is the large builders who have exposure to bank loans and facing the heat of servicing them who are forced to lower their prices. It is not surprising to see some of the larger developers such as DLF, Mantri Housing, Meenakshi, to name a few, being among those who have priced their projects attractively to woo home buyers. Many other larger developers too are looking at fine-tuning their new ventures, he said.
Some of the multiple apartment project developers, such as Manjeera Construction, recently came up with a festive offer of a two-bedroom apartment with all amenities for Rs 25 lakh, a huge discount. This had led to a rush for bookings. More developers are looking at the affordable segment as this is the space offering much scope for growth. However, the supply in high-cost projects is much more than what the market can immediately consume, they felt.
It is higher cost apartments that are now facing the heat due to job losses in the IT sector. There is some stagnation in this area, said Mr Prabhakar Rao. Many home buyers are now coming out of their shell to invest in projects where they can relate to pricing. They also know that the market has stabilised and banks have begun to lend selectively. For instance, Rainbow Vista project has had nearly 11 banks supporting the venture mainly due to the price structure, Mr Korupolu said.
Asked about the input costs, Mr Korupolu said that the price of steel and cement had come down significantly from the dizzy highs seen in 2007-2008. However, the cost of labour has gone up. This is one area for concern. After considerable uncertainty in the market, the sector is beginning to look up.
The Chairman and Managing Director of IVRCL, Mr. E. Sudhir Reddy, believes that the real estate market is still not attractive for those who have acquired land in the last two-three years when the prices were ruling high. He argues that it is not an attractive proposition to enter into affordable housing segment as yet. This is because the market has already become aggressive. Unless the Government offers land at lower rates, it would be difficult to offer attractively priced properties.
Source: http://www.indianrealtynews.com
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