Economy In A Mess; Boon Or Bane For Home Buyers?

Bangalore: With the economy of the country caught in a whirlwind, home buyers are shying away from the real estate market, leaving developers to struggle with their unsold inventories. There are over 700 million square feet apartments in India that remains unsold, due to which developers are compelled to cut prices and dole out freebies, reports Ravi Teja Sharma of Economic Times.

Considering this current real estate ecosystem, both builders and developers are giving handsome freebies to sell their unsold units. For instance, builders are offering around 10 percent discount on apartments in promising locations like Noida Extension and Dwarka Expressway. A 1,100 square feet apartment in Noida Extension that costs about 42 lakh earlier, now available at 37 Lakh.

In April-June period, the housing prices in 22 out of 26 Indian cities are observing downward trend when compared to the previous quarter. This market scenario is directly depending on the demand and supply quotient, according to National Housing Bank's (NHB) residential housing index, Residex. However, property prices are expected to decline further, said NHB Chairman RV Verma. "Developers are now willing to take a haircut on their margins," he added.

This falling rupee can prove beneficial for first-time home buyers. Apparently, it is the right time to make a purchase as developers are struggling with their launches and willing to reduce prices.

Even developers, whose name was enough to sell projects, are now forced to woo buyers with new strategies and freebies. International holidays, subvention schemes, roping in Bollywood stars to promote projects are some of the strategies developers are adopting to attract buyers.

It is a good time to negotiate for better deals, said market agents. Although, builders are ready to cut prices by 10 percent and another 5-6 percent is possible on further negotiation, remarked Sunil Kapur of Delhi-based KK Real Estate.

According to Niranjan Hiranandani, Mumbai-based well-known builders, the demand for housing is still intact but the only issue is the falling economy and market uncertainty due to which buyers and investors are choosing to stay away from the market.

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