THANE: Home sales, especially sale of luxury apartments, have been tepid in most large Indian cities. But, signalling a rising sentiment in real estate sales, Thane developers are launching apartments to boost confidence of investors and buyers.
The spurt (of pre-launches) has come as the state government is thinking to further reduce the high stamp duty rates and also further ease hurdles in regulatory clearances.
In a pre-launch, real estate firms begin selling a project ahead of a formal launch and before getting all the required approvals to create a buzz around it as well as to gauge market response. Buyers and investors, in return, get sharp discounts of 10-15% or more at this stage as an incentive for the risk involved.
Over the past two years, pre-launch activity had dropped, especially in Mumbai, because of the miserable real estate market as well as uncertainties in obtaining approvals. It's not the same anymore.
Kalpataru's Sunrise project on the erstwhile Bayer factory on Kolshet road in a less-publicised launch sold about 400 flats. Similarly, Runwal's Eirene project at Balkum got sales of almost 300 flats in the initial offering.
Developers saddled with large unsold inventory in huge projects will be under greater pressure to offer discounts than those with smaller projects and limited inventories, JLL chairman and country head Anuj Puri had earlier told TOI. "Developers will also offer buyers attractive pre-launch benefits in a bid to accelerate sales momentum in the initial months following a launch," he had said.
According to brokers, the two biggest reasons why buyers in Thane and Mumbai are still voicing reluctance are because of expectations of a decline in prices and lack of confidence in the developer's ability to deliver.
"Considering the price range, new project launches in the past 18 months are not attractive to a buyer,'' a broker said. Pankaj Kapoor, founder of property research firm Liasas Foras said pre-launch offers are good in a fair and balanced market. "There is lack of parity in the price offered in the pre-launch. This imbalance needs to be curtailed,'' said Kapoor.
According to Liases Foras, a majority of the properties on offer are over the Rs 75 lakh bracket. As against this the demand for residential homes is primarily in the Rs 45 lakh to Rs 70 lakh segment, and available only in the far-flung suburbs of Panvel, Neral, Dombivli, Badlapur and beyond.
There is no provision in the Maharashtra Ownership Flats (Regulation of Promotion of Construction, Sale, Management and Transfer) Act, 1963 that allows developers to make pre-launch offerings before obtaining clearance for their building plan. However, developers both big and small, across the country are using this method.
If the pricing is right, investors who have been sitting on the fence for long due to the lack of launches in Mumbai will come in. A number of pre-launches will pick up post-parliamentary elections.