New supplies, resellers to bring down home prices
Sep 04, 2013
Source : The Economic Times


BANGALORE/MUMBAI: If you have been waiting to buy a home, this could be your chance for some bargain hunting as nearly five lakh apartments are expected to be delivered this year, shaking up an already oversupplied home market and forcing investors to sell them in a hurry.

"The widening demand supply gap will help prices fall further," says Pankaj Kapoor, managing director of Liases Foras, a property research firm, which supplies market data to banks and industry.

ET reported on Monday that property prices have begun to soften around the country and builders have started to offer discounts as high as 10% in some cases. According to the National Housing Bank's (NHB) residential housing index Residex, 22 of the 26 cities it tracks have seen a decline in home prices between 1% and 5% in the April to June quarter.

While builders under pressure have started offering discounts, an even better opportunity is emerging in the secondary-resale market where over-leveraged investors who had picked up properties over the last few years are willing to offload their inventory at discounts as high as 30%.

The advantage for a home buyer is that several of these apartments that investors are selling in cities like Gurgaon, Noida, Mumbai, Bangalore and others, will be delivered in 2013, so the wait for your dream home could become much shorter.

Many investors who are already sitting on ready-to-move-in properties are also exiting at discounts for want of funds and the fear of a further correction.

Amit Bansal, who runs a chemicals business and has been investing his business surplus into real estate, sold a 2,400 sq ft apartment in Emaar MGF's Palm Terraces Select on Golf Road Extension in Gurgaon for Rs 8,300 sq ft fearing a drop in prices in the current market. Just a few months back he was getting offers of Rs 8,600 per sq ft for the same apartment.

For the end-user who bought the apartment, the price was a decent bargain, of over 40%, considering the developer's price is around Rs 12,000 per sq ft. For Bansal too, it was a more than profitable exit as he had invested at a much lower price point.

In Mumbai, an investor is selling an apartment in a project called Dheeraj Celestial in Bandra for Rs 55,000 per sq ft while the builder is selling it at Rs 70,000 per sq ft.

In south Kolkata's Topsia First lane, Mohammad Rafique bought a 1,100 sq ft apartment for Rs 2,500 per sq ft in 2007. While the developer's rate is Rs 4,500 per sq ft in the same project today, Rafique sold it for Rs 4,000 per sq ft.

In search of liquidity, Prabhakar D, who bought a property in Channasandra in the eastern periphery of Bangalore, is selling an apartment that he got for Rs 36 lakh for Rs 50 lakh. The market price of the apartment is around Rs 70 lakh. "The response has been overwhelming," says Prabhakar.

Latest Realty News

Land deal: Salim Raj moves HC
Sep 04, 2013
KOCHI: Salim Raj, the suspended gunman of Chief Minister Oommen Chandy, on Tuesday approached the High Court challenging the single judge’s order directing the State Police Chief to take steps to seize the telephonic records of persons allegedly involved in land deal cases. In his plea, Salim Raj stated that there was no criminal case registered in connection with the land deal case, hence the order was not sustainable.
Notice issued to Asaram ashram near Bhavnagar
Sep 04, 2013
RAJKOT: Bhavnagar Area Development Authority (BUDA) on Tuesday issued a notice to Asaram ashram in Lakhanka village near the city for land encroachment.
Property fraud cases to now get solved easily
Sep 04, 2013
NOIDA: From now on, cases of forgery related to registration of land and property in Gautam Budh Nagar can be resolved at the department of stamps and registration in Noida. Earlier, complainants had to move various courts to adjudicate these matters, which often stretched on for several years owing to pendency of cases.
Realtors get notice for flouting groundwater ban
Sep 04, 2013
NOIDA: Officials of Noida Authority on Monday held a meeting with realtors to decide the course of action in the cases filed in the National Green Tribunal (NGT) regarding construction around Okhla Bird Sanctuary and extraction of groundwater at various sites.
Ingersoll Rand working on Nano homes
Sep 04, 2013
PUNE: Industrial technology major Ingersoll Rand is working on a new “Nano-like” concept for dwellings which will be small, affordable and sustainable, Venkatesh Valluri, Chairman and President has said.
Property expo in Kochi
Sep 04, 2013
KOCHI: is organising the second edition of Gruhapravesham 2013, the property show in Kochi, from September 6 to 8 at Jawaharlal Nehru Stadium.
BJP demands AG removal for at transaction
Sep 04, 2013
BHUBANESWAR: BJP on Monday demanded that an independent body should be entrusted to probe the multi-crore chit fund scam to unearth the alleged involvement of the BJD Government and sought immediate removal of the Advocate General for his criminal misconduct relating to complicity with one of the chit fund kingpins.
A look at top investment destinations giving best returns in a slumping realty market
Sep 04, 2013
MUMBAI: A big garments exporter in Mumbai wants to invest his kitty of Rs 50 crore somewhere, but neither does the stock market have appetite, nor is gold cheap. His only other option is real estate, but in Maximum City, yields are falling sharply. So, his wealth manager has now advised him to invest in properties in Adayar — some 1,300 km away. Adayar, in south Chennai, is one of the southern city's most expensive neighbourhoods.
CCEA clears 2 proposals for housing for the poor
Sep 04, 2013
DELHI: Government today cleared two proposals for providing affordable housing to the urban poor and provide them with self-employment and skilled wage employment opportunities to help reduce poverty.
Warning bell: RBI red flags 20:80 home loan schemes
Sep 04, 2013
MUMBAI: The Reserve Bank of India (RBI) wants banks and home buyers to be wary of the so-called '20:80, 25:75' schemes as a default by the builders could affect the credit profile of the borrower and expose the banks to higher NPAs and possible diversion of funds. Real estate companies have been offering schemes called 20:80 and 25:75 where the builder agrees to pay interest on the borrower's loan for a specific period.

Latest Realty News Of State

Realty Talk's