Wednesday, October 29, 2008
After the slowdown in demand for residences, developers and international property consultants have realised that 'integrated townships' are the next trend across the country. Many realty majors are focusing on the development of integrated townships. Even as DLF Ltd is planning to develop 4,840-unit ‘Dankuni’ township in Kolkata, the Housing Infrastructure Development Corporation (HIDCO) is developing 9,334-unit 'Rajarhat' township in the periphery of Kolkata. Emaar Group is planning to develop 520-unit 'Boulder Hills' township in Hyderabad. Parsvanath also is planning to develop 2,500-unit township in Chennai. This is according to a recent market overview done by Jones Lang LaSalle Meghraj.
Single-family housing starts fell more than anticipated in September, falling to the lowest level in a quarter century and indicating the real-estate slump intensified even before the recent credit meltdown. Construction began on 817, 000 houses last month, down 6.3 percent from Augusts’ 872, 000 level that was lower than previously estimated, the Commerce Department said in Washington. Building permits, a sign of future construction, dropped 8.3 percent to 786, 000 pace, the lowest level since November 1981. Starts were projected to fall to an 872, 000 annual pace from a previously estimated 895, 000 million in August, according to the median forecast of 74 economists polled by Bloomberg News. Estimates ranged from 840, 000 to 935, 000. Compared to September 2007, work began on 31 percent fewer homes. Construction of single-family homes dropped 12 percent to a 544, 000 rate, the fewest since February 1982. Starts of single-family houses dropped to record lows in three of four regions in September, led by a 24 percent slump in the Midwest.
The new mantra for city malls is to entice customers into staying at the mallsonly. For instance, the Select City Walk Mall in Saket, recently unveiled 83 plush suites spread across five levels, complete with living room, kitchenette and designer bedrooms, called Svelte Suites. These suites are classified as Executive, Royal, Grand, Deluxe and Presidential suites. Their rates range from Rs 12, 000 to Rs 30, 000 per night, with room sizes ranging from 450 sq ft to 1,100 sq ft. The Ambience Group will soon have a luxury 319-room hotel and 90 service apartments by the Leela Group in the Ambience Mall in Gurgaon. The hotel will cater to the tourist inflow expected during the 2010 Commonwealth Games. Sun City Developers, builders of the Cross River Mall, are also planning a mega project of 40 lakh sq ft in Greater Noida, which will house retail space, offices, a five-star hotel and an entertainment island. As real estate developers fight to offer better amenities, the customer is spoilt for choice.
Considering the current global economic slowdown and its impact on the Indian economy, realtors are coming up with novel marketing strategies to woo reluctant flat buyers. Realty players such as Mantri Synergy, Jains Sunderbans, ETA Rosedale and Hirco Palace Gardens have come out with new schemes to attract buyers. To lift up the 'sagging morale' of prospective buyers, property developers have now come forward to pay pre-EMI (equated monthly installment) interest on part-money disbursed on the housing loan taken by a flat buyer. In the changed economic context, the prospective flat buyers have turned cautious and are deferring their buying decisions, anticipating a drop in real estate prices. This has put the developers in a fix. In order to retain the buyer, especially during this period, the developers are now opting to dish out freebees such as payment of pre-EMI.
All those who are looking at buying property are now faced with a different kind of situation with regard to payments. Earlier, a buyer had to pay the builder a specific percentage of the total price as various stages of construction were completed. Many builders are now abandoning this mode of payment in favour of time-based payments. One should be aware of the working of this system, because it impacts their finances. In this form of payment, one pays the builder specific sums at certain pre-decided intervals. But it presents higher risk for buyers because they will need to make the necessary payment as per the schedule, but have little control over the construction of property. Due to this, there is a fair chance of delay creeping into the process. This is especially true if the builder gets into some kind of financial trouble and has to slow down construction activity. In such a situation, there is little that buyers can actually do because they have made the payment and can only wait for the delivery of the completed premises. So, this kind of payment should be efficiently monitored because of the higher risk element involved. If there are reputed parties at the other end of the transaction, there is some relief for buyers because they will not disappear with the money. However in other cases, buyers have to take necessary care and precaution before entering into such agreement. This would ensure that they are not chasing builders after sometime when the construction is not yet complete and they are yet to see the benefit of their investment.