Home loan demand zooms
The Economic Times, October 22, 2009, Page 15
THE bulk of the sales happened in the last 90 days and majority of the homes sold were in the affordable segment. By the end of the fiscal in March 2010, builders hope they will have sold close to the 190 million sq ft they managed in 2007.
Across the expressway where the Bansals plan to shift in about two years, Jaypee is building Wish Town, a 1,162-acre swish golf township with premium homes, malls, school, colleges and hospitals. It originally launched apartments with a view of the golf course and priced these at a minimum of around Rs 1 crore. But it has now launched smaller flats starting at Rs 25 lakh. “In six months, we sold 10,000 affordable homes, while we also managed to sell another 2,000 luxury apartments around the golf course,” says Manu Goswami, head, sales and marketing, Jaypee Greens.
Unlike three years ago, when most developers were not offering affordable houses, everyone is now in this segment, says Hiranandani Group chairman Niranjan Hiranandani. Mumbai, where Hiranandani is based, has seen close to 8.4 million sq ft of housing sold in the last six months.
“Sanctions have picked up and we are at 70% of the peak. We expect home loan disbursals to reach the peak levels of 2007 by the end of this fiscal, subject, of course, to developers not increasing rates further,” says SN Nagendra, senior general manager, HDFC Ltd, one of the country’s biggest housing finance companies.
Developers say enquiries for homes began around March 2009 and conversions started July onwards, with the bulk of the demand in the affordable segment.
There was latent demand but it was not converted into sales due to economic uncertainly, observed Mr Hiranandani. “The sudden spurt in demand due to perceptible change in the economic environment in the last three months, combined with lower interest rates, have bolstered the confidence of the home buyers.”
Among the major developers who have ridden this new real estate wave are Unitech, the Jaypee group, DLF, BPTP and Omaxe, witnessing a sharp rise in demand, particularly for new projects.
Home loan trends bolster this claim. In the first six months, State Bank of India’s disbursements were in excess of Rs 10,000 crore, compared to Rs 3,900 crore in 2007-08 and Rs 4,900 crore in 2008-09 for the April-September period. “We are sanctioning much higher volumes now for home loans. The growth in home loans has been even higher than in 2007,” says P Nandakumaran, head retail banking, SBI.
However, due to lower pricing, average realisations for most real estate players is down 25-30% per sq ft in comparison to 2007-08. Unitech has seen its average sales price coming down from Rs 4,000 per sq ft before September 2008 to Rs 3,234 per sq ft in the last six months.
The profitability of these companies will surely come down due to the decline in realisation, says Aditi Vijayakar, executive director, residential service at real estate consultancy Cushman & Wakefield. “The profit margin of these companies depends on when and at what price these developers bought the land,” she added.
Jaypee, which has sold close to 11.5 million sq ft of residential space in six months, has seen a decline of 25-30% in average basic sale price, primarily because it is selling more affordable homes.
Unlike the last boom period, when developers concentrated solely on luxury housing, the current surge is seeing a mix of both affordable and luxury housing.
“The market was overheated and people were waiting for it to come back to a realistic level. The expectations of developers and buyers were mismatched. Everyone was working on the wrong product, including us,” says Jaypee’s Goswami.
A senior executive of DLF, the largest real estate player in the country, said the company has sold 2.5 million sq ft of space in the last three months. Of this, about 2.1 million sq ft has been sold in the last 30 days.
“The confidence of people is back as the economy is turning around. This has led to robust demand for housing at good locations and affordable prices,” says Rohtas Goel, CMD, Omaxe. The company has sold close to 1.8 million sq ft of housing space over the last three months.
Delhi-based developer BPTP has sold about 6,800 homes across three properties in Faridabad totalling about 7.76 million sq ft.
The Economic Times, October 22, 2009, Page 15
THE bulk of the sales happened in the last 90 days and majority of the homes sold were in the affordable segment. By the end of the fiscal in March 2010, builders hope they will have sold close to the 190 million sq ft they managed in 2007.
Across the expressway where the Bansals plan to shift in about two years, Jaypee is building Wish Town, a 1,162-acre swish golf township with premium homes, malls, school, colleges and hospitals. It originally launched apartments with a view of the golf course and priced these at a minimum of around Rs 1 crore. But it has now launched smaller flats starting at Rs 25 lakh. “In six months, we sold 10,000 affordable homes, while we also managed to sell another 2,000 luxury apartments around the golf course,” says Manu Goswami, head, sales and marketing, Jaypee Greens.
Unlike three years ago, when most developers were not offering affordable houses, everyone is now in this segment, says Hiranandani Group chairman Niranjan Hiranandani. Mumbai, where Hiranandani is based, has seen close to 8.4 million sq ft of housing sold in the last six months.
“Sanctions have picked up and we are at 70% of the peak. We expect home loan disbursals to reach the peak levels of 2007 by the end of this fiscal, subject, of course, to developers not increasing rates further,” says SN Nagendra, senior general manager, HDFC Ltd, one of the country’s biggest housing finance companies.
Developers say enquiries for homes began around March 2009 and conversions started July onwards, with the bulk of the demand in the affordable segment.
There was latent demand but it was not converted into sales due to economic uncertainly, observed Mr Hiranandani. “The sudden spurt in demand due to perceptible change in the economic environment in the last three months, combined with lower interest rates, have bolstered the confidence of the home buyers.”
Among the major developers who have ridden this new real estate wave are Unitech, the Jaypee group, DLF, BPTP and Omaxe, witnessing a sharp rise in demand, particularly for new projects.
Home loan trends bolster this claim. In the first six months, State Bank of India’s disbursements were in excess of Rs 10,000 crore, compared to Rs 3,900 crore in 2007-08 and Rs 4,900 crore in 2008-09 for the April-September period. “We are sanctioning much higher volumes now for home loans. The growth in home loans has been even higher than in 2007,” says P Nandakumaran, head retail banking, SBI.
However, due to lower pricing, average realisations for most real estate players is down 25-30% per sq ft in comparison to 2007-08. Unitech has seen its average sales price coming down from Rs 4,000 per sq ft before September 2008 to Rs 3,234 per sq ft in the last six months.
The profitability of these companies will surely come down due to the decline in realisation, says Aditi Vijayakar, executive director, residential service at real estate consultancy Cushman & Wakefield. “The profit margin of these companies depends on when and at what price these developers bought the land,” she added.
Jaypee, which has sold close to 11.5 million sq ft of residential space in six months, has seen a decline of 25-30% in average basic sale price, primarily because it is selling more affordable homes.
Unlike the last boom period, when developers concentrated solely on luxury housing, the current surge is seeing a mix of both affordable and luxury housing.
“The market was overheated and people were waiting for it to come back to a realistic level. The expectations of developers and buyers were mismatched. Everyone was working on the wrong product, including us,” says Jaypee’s Goswami.
A senior executive of DLF, the largest real estate player in the country, said the company has sold 2.5 million sq ft of space in the last three months. Of this, about 2.1 million sq ft has been sold in the last 30 days.
“The confidence of people is back as the economy is turning around. This has led to robust demand for housing at good locations and affordable prices,” says Rohtas Goel, CMD, Omaxe. The company has sold close to 1.8 million sq ft of housing space over the last three months.
Delhi-based developer BPTP has sold about 6,800 homes across three properties in Faridabad totalling about 7.76 million sq ft.
Posts
No comments:
Post a Comment