• News by Month

  Select Month February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008 November 2008 October 2008 September 2008 August 2008 July 2008 June 2008 May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 November 2007 October 2007 September 2007 August 2007 July 2007 June 2007 May 2007 April 2007 March 2007 February 2007 January 2007 December 2006 November 2006 October 2006 September 2006

• News by City

  • Bangalore
  • Chennai
  • Delhi
  • Faridabad
  • Gurgaon
  • Hyderabad
  • Kolkata
  • Mumbai
  • Noida
  • Pune

• News by Category

  • NRI
  • FDI
  • Home Loans
  • Real Estate India
  • Banking and Finance
  • Real Estate Developers

« Ansal Properties nears Rs300 crore private equity deal | Home | Hilton Worldwide bullish on Indian real estate market »

No takers for low cost homes

MUMBAI: When three years ago record home prices and higher interest rates dampened demand, developers hit on the idea of constructing affordable (mass) housing projects to fuel sales.

Three years later, leave alone flats worth crores, Mumbaikars are wary of touching even much cheaper property; a survey finds at least a third of the under-construction flats, priced below Rs 35 lakh, in the Mumbai Metropolitan Region have not yet been booked. Nearly 36% of flats costing approximately Rs 35 lakh that are currently being constructed are lying unsold in Mumbai, says a study carried out by Knight Frank, global real estate consultants. These flats are located in the western suburbs beyond Borivali and Thane.

Its an all-india trend. Data by the consultants shows that developers who had rushed to launch these affordable housing projects are sitting with 44% of unsold stock. While the demand for Rs 35 lakh apartments went up in Mumbai, Gurgaon, Noida, Thane, Bangalore, Kolkata, supply grew at a faster pace as realtors rushed into the market to improve their cash flows at a time when there were few takers for upper-end dwelling units.

Hyderabad has the highest unsold stock of 54% while Bangalore and Kolkata had 50% respectively. Pune had 25% unsold stocks.

A number of property developers such as Unitech, Omaxe, Tata Housing, Puravankara, Lodha Developers and Ansal have announced projects in the sub-Rs 30 lakh category in the last one year following the economic downturn, coupled with fear of job losses and salary cuts that slowed sales of premium projects.

Property experts said a lot of developers took the plunge as it was the only segment that was doing well. And, since unit sizes were small, more houses were built in a given piece of land. Supply has overshot demand and, therefore, we are seeing a piling up of inventory,” said a consultant.

Price hike had a big role to play in this.

According a real estate broke in recent months many developers increased rates sensing signs of normalcy in the market. The impact of the price rise has been in all segments, but since the sub-Rs 30 lakh segment was selling the most, sales were hit maximum in this segment,” said he said.

Source: http://timesofindia.indiatimes.com/city/mumbai/No-takers-for-low-cost-homes/articleshow/11622189.cms

News Published Under:   Real Estate India | No Comments »

Comments

Name (required)   

Mail (required)      

URL