Real estate developers changing tracks,Low cost homes in demand
By Riti, Section Gurgaon Real Estate Property
Posted on Sun Jul 20, 2008 at 10:01:29 PM EST
The recent slump in real estate might have slowed down things but the demand still remains promising. Real estate developers are changing tracks in these difficult times and pricing houses cheaper since industry data indicate there is very little supply in the price band where people can actually afford a home. This is especially true at least in the national capital region or NCR.
At present there is a huge demand supply mismatch in the price category of below Rs 40 lakhs and below Rs 75 lakhs where demand outstrips supply. There is excess supply in the price band of above Rs 75 lakhs.
"The problem is that the supply is coming at a higher per sq ft rate, the demand for property more than 75 lakhs is not growing. There is going to be a disconnect between what people are wanting to buy and what builders are wanting to sell, so that overlap between demand and supply is slowly becoming smaller," said Aditya Verma, Business Head of Makaan.com.
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What is also forcing private developers in NCR to change their policy is moves by organizations like the Delhi Development Authority which plans to release around 6000 flats which will priced to cater to the lower price band.
"Definitely we are already witnessing that developers are coming up with schemes which are more conducive to the consumer," said Shveta Jain, Associate Director, Cushman and Wakefield.
India's second biggest realty company, Unitech, recently modified its product offering in its premium property Nirvana Country such that independent floors were given starting from Rs 40 lakhs.
Earlier a villa here used to cost upwards of Rs 1.5 crores. The management says that it has received a good response.
Right now prices are coming down by reducing the size while the salaries haven't moved as fast as the realty prices but the dream of owning a house is still intact. In such a situation, companies are left with no choice but to modify its product and prices to correct the supply demand mismatch.
Source:NDTVprofit.com 20thJuly2008.
