Realtors open discount window
The Economic Times, March 17, 2009, Page 5
Unitech, DLF, HDIL, BPTP Offer 30-40% Price Cut On New Residential Projects To Stimulate Demand
Ravi Teja Sharma NEW DELHI
REAL estate developers have found a new way of activating the market. Developers such as Unitech, DLF, HDIL, BPTP and others have launched residential projects in the last couple of months at 30-40% discount to ongoing projects. Analysts believe this will stimulate demand and add muchneeded liquidity to the industry grappling with the problem of not being able to sell off projects launched a year back. “The market might not be bouncing back as yet but because of these launches, the movement has started surely. This is giving confidence to buyers,” says real estate consulting firm CB Richard Ellis CMD Anshuman Magazine.
DLF has launched two projects, in Hyderabad and Bangalore, in the last 3 months totalling close to 4,000 units. Executive director Rajeev Talwar informed that of these, about 500 units have already been sold in the price range of Rs 1,850-1,890 per sq ft. “These prices are lower than prices in 1998,” says Mr Talwar. DLF is expecting sales to improve in the near future. Developers are launching completely new projects. “They have realised that they cannot sit on idle land and need to launch at current market prices,” says Mr Magazine. “The good news is that the response has been fairly good considering the current market conditions,” he adds. Unitech too has launched a few projects in the last 2 months—at Gurgaon and at Dadar in Mumbai. Unitech’s Uniworld Garden II in Sector 47, Gurgaon has been launched at Rs 3,250 per sq ft. “What this launch has done is that it has brought down the ticket size 40-50% in this area,” says Unitech head (corporate planning) R Nagaraju. Mr Nagaraju claims that all the 150 units launched in the first phase in Gurgaon were sold out in 12 days. Indiabulls has launched Centrum Park at Sector 103, Gurgaon recently at a price of Rs 1,950 per sq ft. This is almost 40% lower than prices in the area last year. Sobha Developers, which was planning a project in the same area at a price range of Rs 3,500-4,000 per sq ft, has deferred its plans.
Edelweiss Capital real estate analyst Aashiesh Agarwaal feels it is important for developers to maintain a presence in the market they chose to operate in. “It will help them monetise their land assets which are lying idle at the moment,” he says.
What is reassuring is that a lot of people are back window shopping, says Cushman and Wakefield India executive director (residential) Aditi Vijayakar. But transactions are still slow and people are taking a lot longer to decide. Buyers are uncertain about the delivery capabilities of developers, as the market has seen a number of projects getting delayed recently. Mr Agarwaal though sees this has a release of pentup demand at the price points being offered by developers today. “Marginal buyers have converted at this price point but we don’t see it sustaining. This is a temporary rise in demand,” he says. A robust employment outlook and positive debt repayment capacity will dictate demand outlook going forward, he says. But this is probably the best time to go shopping. “Developers are looking for genuine customers and not punters. There are more projects available and developers are willing to listen to you and hopefully negotiate too,” says Miss Vijaykar.
The Economic Times, March 17, 2009, Page 5
Unitech, DLF, HDIL, BPTP Offer 30-40% Price Cut On New Residential Projects To Stimulate Demand
Ravi Teja Sharma NEW DELHI
REAL estate developers have found a new way of activating the market. Developers such as Unitech, DLF, HDIL, BPTP and others have launched residential projects in the last couple of months at 30-40% discount to ongoing projects. Analysts believe this will stimulate demand and add muchneeded liquidity to the industry grappling with the problem of not being able to sell off projects launched a year back. “The market might not be bouncing back as yet but because of these launches, the movement has started surely. This is giving confidence to buyers,” says real estate consulting firm CB Richard Ellis CMD Anshuman Magazine.
DLF has launched two projects, in Hyderabad and Bangalore, in the last 3 months totalling close to 4,000 units. Executive director Rajeev Talwar informed that of these, about 500 units have already been sold in the price range of Rs 1,850-1,890 per sq ft. “These prices are lower than prices in 1998,” says Mr Talwar. DLF is expecting sales to improve in the near future. Developers are launching completely new projects. “They have realised that they cannot sit on idle land and need to launch at current market prices,” says Mr Magazine. “The good news is that the response has been fairly good considering the current market conditions,” he adds. Unitech too has launched a few projects in the last 2 months—at Gurgaon and at Dadar in Mumbai. Unitech’s Uniworld Garden II in Sector 47, Gurgaon has been launched at Rs 3,250 per sq ft. “What this launch has done is that it has brought down the ticket size 40-50% in this area,” says Unitech head (corporate planning) R Nagaraju. Mr Nagaraju claims that all the 150 units launched in the first phase in Gurgaon were sold out in 12 days. Indiabulls has launched Centrum Park at Sector 103, Gurgaon recently at a price of Rs 1,950 per sq ft. This is almost 40% lower than prices in the area last year. Sobha Developers, which was planning a project in the same area at a price range of Rs 3,500-4,000 per sq ft, has deferred its plans.
Edelweiss Capital real estate analyst Aashiesh Agarwaal feels it is important for developers to maintain a presence in the market they chose to operate in. “It will help them monetise their land assets which are lying idle at the moment,” he says.
What is reassuring is that a lot of people are back window shopping, says Cushman and Wakefield India executive director (residential) Aditi Vijayakar. But transactions are still slow and people are taking a lot longer to decide. Buyers are uncertain about the delivery capabilities of developers, as the market has seen a number of projects getting delayed recently. Mr Agarwaal though sees this has a release of pentup demand at the price points being offered by developers today. “Marginal buyers have converted at this price point but we don’t see it sustaining. This is a temporary rise in demand,” he says. A robust employment outlook and positive debt repayment capacity will dictate demand outlook going forward, he says. But this is probably the best time to go shopping. “Developers are looking for genuine customers and not punters. There are more projects available and developers are willing to listen to you and hopefully negotiate too,” says Miss Vijaykar.
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