Buyers Pressurize Govt for Price Cut

The economic slowdown has compelled people to pressurize government to bring down the real estate prices. Around 225 Mumbaikars who have booked 2-BHK flats in a residential scheme named ‘Celebration’ by the City and Industrial Development Corporation (CIDCO) threatens to withdraw from the project in case of non-fulfillment of their demand. These people demand to reduce the rates by 35-45% and it is viewed as the first such mass move in the entire Mumbai region that put pressure on the government to bring down the real estate prices. As a result if CIDCO administration slashes the rates, many other private developers in the region would also revise down their rate. This will thereby benefit the consumers who are looking forward to buy a house.

Under the Celebration scheme, there are a total 532 2-BHK flats and 465 1-BHK flats for which the construction work is under process. People have booked the flats at Rs 3,450 per sq ft but they want these rates to come down to Rs 2,245 per sq ft. An association of 220 buyers who appealed to the CIDCO officials said, “Due to the global economic downturn, the real estate market prices have come down by 35-40% as GDP has fallen from 9% to 5.3%. Similarly, the cost of construction material like cement and steel has come down with city developers slashing property rates by 35-40%.” Meanwhile N C Upase, who has booked a 2-BHK flat, said: “Recently in our meeting at Dhruv hall in Dadar, we decided to withdraw our bookings as the last resort if the CIDCO pays no heed to our demands.”

The buyers association also said that CIDCO had finalized the rates when the market rates were high. “Though we are categorised as higher income group, we would like to express that the economy has hit us hard and are now feeling the cost of the house as an enormous burden,” said the buyers-under the banner of Celebration Action Committee. Further Upase said that even the finance ministry had appealed to the developers to cut the real estate prices in order to boost up the economy. So CIDCO is expected to follow the same, he said. However joint MD of CIDCO, Dilip Jadhav said that the reduction was not possible at the moment. “With the help of financial consultants and economists, we will have to scientifically evaluate the pricing policy for the scheme and only then can the CIDCO board decide on the matter,” he added. If the buyers withdraw from the project then the first installment of Rs 4.5 lakh paid would be forfeited.

News Courtesy : Indianrealitynews

NRIs - Ray of Hope For Realtors

Realtors in Mohali district have seen a ray of hope among NRIs to keep their business going during the global slowdown. While the local buyers are hesitating from buying houses coming up in large number in the district, it is the interest of NRIs from Canada, US, England and middle-east countries that has given a new lease of life to real estate sector. With thousands of NRIs inquiring about the availability of houses, flats and villas, real estate sector has all of a sudden got fresh lease of life that otherwise was witnessing a low business for the last four-five months. A visit to Zirakpur and surrounding areas revealed that number of inquiries from NRIs for housing properties in Mohali have gone beyond 3,000 during last few months.

Such is the response that one of the real estate development Royal Estate has already decided to come up with a NRI tower in Zirakpur due to rising demand for houses from NRIs. Krishan Goyal, managing director, Royal Estate Zirakpur, said during last two months he had received over 500 inquiries from NRIs and had already sold 4-5 flats to them. ??We have now decided to come up with NRI tower at Royal Estate as demand is great,?? he added. Satish Jindal, managing director, Maya Garden Zirakpur, too is smiling with the expectation of good business ahead as after receiving over 600 inquiries for houses during last two months, he has sold 6-7 flats to them. Response from NRIs is amazing and it shows that good days for real estate sector are lying ahead, he added.

Many of the builders attribute the sudden interest among NRIs for houses in Zirakpur and surrounding areas to the fact that from June onwards international flights are scheduled to take off from upcoming international airport. Interestingly, while Indians residing abroad are showing great interest in buying property in Mohali district, domestic buyers are not coming forward to buy while inquiries in hundreds are being received. Realtors are expecting market to improve on local front also. Subash Chand, partner, Swastic Vihar Zirakpur, said that while there was good response from the NRIs, local buyers are waiting for the property prices to be slashed further. They expect good business from April 1 onwards, as service tax would be completely withdrawn and interest rates are expected to be lowered further. Vijay Arora, president, Peermuchalla Builders Association, said that around 100 inquiries are coming on a single day while sales are not picking up. All expectations are resting on new financial year. With NRIs buying property it seems that market would improve further he added.

Courtesy : nrirealtynews

Foreign Investors Eyeing Badly Hit Small and Mid Size Indian Developers

Foreign private equity investors are eyeing the Indian real estate market to buy properties from small and mid size developers badly hit by the economic downturn. A clutch of big investors from the EU and Middle East are expected to invest $400-500 million in distressed land deals. These include Spain’s Nova Capital; Germany’s SachsenFonds, Qatar based Barwa International and Al Aqueela, UK’s Matrix Partners and Aberdean International. “In the next six months, we will see lot of distressed real estate deals in India. Small and medium developers with turnovers in the range of Rs 50 crore-Rs 250 crore will be forced to go for distress sales to sustain themselves in the economic downturn,” said YEN Management Consultants managing director, Sunil Shirole, who has been approached by such developers.

Small and medium size developers across the nation are said to be stuck with 5-6 projects on average as demand has been sluggish. They plan to sell 40 per cent of the existing projects at a discount of 25-40 per cent of the original price to fund rest of their projects. Shirole said, “We could see 50 per cent of total real estate market coming under distressed deals. As foreign PE players have the liquidity and staying power, after buying such properties, they can wait 4-5 years or till such time the property market rebounds to sell them at higher price.” However, the outcome of general election can play spoilsport. “A stable government is a prerequisite to these foreign investors. If there are frequent changes at the Centre, they might turn their back for another five years,” cautioned Arun Goel, CEO, DHFL Venture Capital India.

Courtesy : nrirealtynews.com