New trends in real estateThere are new trends in real estate such as affordable housing,luxury housing. Some builders are offering traditional freebies such as savings on stamp-duty, free modular kitchen, free parking and free interiors.
03 Jun 2008
The real estate industry has been one of those which still continue to grow at a dynamic pace, since the last decade or so. Property prices and the demand continue to fluctuate.
There are some developments which have now become trends in residential segment of the real estate industry.
While the builders, the bankers on one side and the buyers on other side indulge in speculation on property, one particular development seems to be keeping property prices afloat. The demand for luxury housing or for high-end properties.
Gone are the days when one could talk of just 'housing' as a concept. 'Affordable' and 'Luxury' housing have emerged as completely two different concepts in this industry. Luxury housing in the latest 'in-thing' in this industry. Whether you are buying high-end properties because you have the requisite funds or just to please yourself, this is one of the major reasons of boom in a realty market oscillating between a slump and a price hike.
When we talk of luxury housing, its about space, a state-of-the art building with amenities (nothing less than Italian fittings for the washroom!)-about extravagance.
These are projects which the builders are more than willing to take up and bankers more than willing to finance.
In cities such as Mumbai, Pune, Chandigargh, New Delhi, National Capital Region, Greater Mohali, Gurgaon, Noida, Chennai, Bangalore, Hyderabad and cities in Goa and Kerala, high-end property projects are mushrooming all the over the place.
Most real estate developers such as EmaarMGF, Parsvnath, Uppal's, Ansals, Unitech, Omaxe, Lodha Developers, Panchsheel Realty, Marvel Realtors, Sobha Developers, DLF, Kalpataru, Nitesh Estates... (the list is endless) are into developing villas, penthouses, condominiums etc. The average luxury home price tag varies between Rs 3 crore and Rs 50 crore, depending on the city it is built in and the range of amenities it offers.
High-end properties have their own consumers; typically belong to the top management in various corporate firms and Non-resident Indians (NRI's).
Whether a developer or a buyer, this property is a grab for them. So, even while there is a sales slump in the residential segment, developers continue to look up to the luxury residential segment to cater to the buyers with High net worth or HNIs. The market for luxury home segment in India is estimated at around Rs.2,000 crore with around 30 million potential buyers.Property exhibitions globally
These developers and high end buyers have brought in another new trend. The property exhibitions of local builders is going global and more and more foreign investors and constructors are being involved. Some developers are even organising property exhibitions and floating sales offices in countries such as UK, US and UAE to market their projects in the overseas market. Roping in private equity firms for funds and foreign architects such as Singapore-based Ong and Ong Ltd. are the latest developments.
Now let's go into the areas of affordable housing. While the government is making all efforts to making using available for all, including the low income groups- developers are also demanding for what is known as Special residential Zones (SRZ's) across the country. The developers have approached the government for Special Residential Zones (SRZ) to be set up outside the main cities. These SRZs are also proposed to be given tax benefits similar to those available on Special Economic Zones (SEZs).
Special Residential Zones
Developers say that SRZs will help builders provide affordable housing to low-income groups for as low as one-third of the existing prices. However, it is also being proposed that SRZs will not be limited to low-income houses.
Cities such as Pune, Vijaywada, Vishakhapatnam, Hyderabad are also emerging as the destinations for integrated townships.
Freebies and discounts have always been used to tempt buyers when there is a slack in demand for property, whether due to high interest rates or a high price tag. Some traditional freebies and discounts offered by builders and developers are savings on stamp-duty, free modular kitchen, free parking and free interiors.
Well, there are other innovation discount schemes in the real estate market. Some developers offer to pay home loan installments for a certain period. Others offer freebies such as free cars, especially those builders who have high-end buyers in luxury housing projects. Orange Properties in South India is offering cars as freebies. The company offered Maruti SX4 for apartments costing up to Rs. 42 lakh and Audi A4 costing Rs 30 lakh to buyers who booked a villa at its upcoming Magnolia Brooksville project in Bangalore.
Some real estate players in the North, such as Parsvnath Developers, BPTP, Gaursons and KDP have unique offering of paying EMIs for the loan till possession in variations. So, while Parsvnath Developers is promoting the scheme of 'No EMI until possession', BPTP and Gaursons offer two-year EMI holiday on specific projects.
While the buyers seems to be benefiting from the proposal, the builders can also raise the money from the market to complete the project at an interest rate of 15-20 per cent. This could assure the developer of booking at 10.5 per cent, the interest rate applicable for home loan borrowers.
So, while the realty industry is still busy with some traditional concerns such as property prices and demand, newer trends seem to be emerging among the buyers, getting the builders to make innovative offers to boost sales and hence, demand.