Builders In good mood to negotiate
Buyers in the market are still undeterred by the recent downturn and continue looking for properties
Even as the buzz today is that home buyers are adopting a wait and watch approach looking for a price correction, this is not true for all the category of buyers. There is a segment which is looking at buying a home dictated by their own personal needs as much as the fact that builders are now in a mood to negotiate. These are buyers across all segments starting from a budget of Rs 35 lakh to go up to any level.
"Despite the current scenario of the stock market crash and the general downturn, there are a lot of buyers in the Rs 50 lakh to one and a half crore segment who are actively looking to buy a house," says developer Abhinandan Lodha, director Lodha Group. Most of them have a family home which may be smaller, and as families grow, they want to shift to a larger 2 BHK or 3 BHK, as per their needs. There are also NRIs who are seeing the dollar appreciating and with the on-going US crisis, see more sense buying a home back here.
Agrees developer Rajesh Prajapati, Director, Prajapati Constructions, in the kind of recession that Europe and US are facing, NRIs feel good to have something at home. Rs. 40 a dollar has now become Rs. 50 a dollar, and hence, what they were getting at 1 lakh dollars, they can now get in only 80,000 dollars.
On the domestic front there are those who have sold their flats and are looking at urgent relocations, or are driven by other personal needs. Suraj Prabhakaran working for an MNC recently bought a flat in Neptune Group's Living Point project at Bhandup (W). Suraj is getting transferred from Bangalore and bought the flat for personal use and not as an investment. He says Bhandup is a central location with connectivity both on the western and eastern line. This would help my working wife and me. He further adds, builders today are negotiating where earlier their attitude was 'take it or leave it.' I could have waited and rented a house but chose not to do so. The stock market crash means values of portfolios have come down and there could be a price correction in real estate but I wanted a ready possession flat without any risks involved. I have found a suitable flat on the 15th floor with a good view where I can live comfortably for the next 25 years.
Elaborates Devang Trivedi, MD, Progressive Group, the segment buying today includes people belonging to the shipping industry, those living in the Middle East or people who have sold their property at good rates and are now looking at buying a slightly bigger one. Then there are those who have to buy property from a tax perspective. There are also those who are quite well to do, and are not bothered even if the prices go down marginally, so long as they are getting a strategic location or a vastu compliant home. This customer feels that if he lets go of this, he will not get the strategic opportunity.
Trivedi continues, there is also a segment looking at opportunity buy. They are ready for a down payment and will strike a good bargain by approaching five to ten developers asking for a particular price. The deal will be done with the builder who, depending on his financials will give them the best price. Opportunity buyers are like investors looking at profit money. They have made money in the stock market, they see that the gold market will eventually correct, since it is a commodity. They will have to finally put their money in real estate or fixed deposits. Fixed deposits would not give that kind of money or appreciation, so they will invest in real estate. They will do value buying and rent it out for some time.
There are also certain long-term investors who are looking at five years down the line. They are looking at a lower price today and getting something unique like say a sea-facing flat or garden facing flat, two apartments combined. These would not be easily available when the market goes up. When the market goes up, he can sell higher. These are buyers with an enterprising outlook.
There are also some properties, which are easily liquidable. For instance flats where there is a ready buyer in the same or adjacent building. The customer only has to find another flat to move into. Suppose he has bought his flat at Rs 60 lakh and is selling at Rs 53 lakh, he can somewhere down the line, put that money in a project that is worth much more for an attractive price.
According to Gulam Zia, national director advisory services, Knight Frank India, the buyer finalising a purchase today may be looking at getting something ideal, say a super luxury apartment at Cuffe Parade or else is looking at buying for his personal use. There are also those who believe that a home loan now would make sense with interest rates peaking and reduced EMIs.
Ramesh Bijlani, director, Ekta Supreme Housing says there are buyers who are actively looking at buying a house for their personal use, since the prices are not going down as they had anticipated. Home buyer S Ramadorai, running an IT company has booked a 3BHK apartment in the Lake Homes Project of Ekta Supreme at Powai says, he has been shopping around for the last one year and has seen prices only rising.
The last one month however has seen some freebies being offered. He went in for this project as it offers good value in terms of open spaces, amenities besides being close to his place of work. Confesses Ramadorai, I have in the past lost money in stocks and in commodities but never in real estate.
Price corrections may be there but there would not be a rundown. Hence customers feel they might as well talk to a builder and negotiate the rates. At the same time, they know that a good builder will deliver his promise, says Bijlani.
Even as the buzz today is that home buyers are adopting a wait and watch approach looking for a price correction, this is not true for all the category of buyers. There is a segment which is looking at buying a home dictated by their own personal needs as much as the fact that builders are now in a mood to negotiate. These are buyers across all segments starting from a budget of Rs 35 lakh to go up to any level.
"Despite the current scenario of the stock market crash and the general downturn, there are a lot of buyers in the Rs 50 lakh to one and a half crore segment who are actively looking to buy a house," says developer Abhinandan Lodha, director Lodha Group. Most of them have a family home which may be smaller, and as families grow, they want to shift to a larger 2 BHK or 3 BHK, as per their needs. There are also NRIs who are seeing the dollar appreciating and with the on-going US crisis, see more sense buying a home back here.
Agrees developer Rajesh Prajapati, Director, Prajapati Constructions, in the kind of recession that Europe and US are facing, NRIs feel good to have something at home. Rs. 40 a dollar has now become Rs. 50 a dollar, and hence, what they were getting at 1 lakh dollars, they can now get in only 80,000 dollars.
On the domestic front there are those who have sold their flats and are looking at urgent relocations, or are driven by other personal needs. Suraj Prabhakaran working for an MNC recently bought a flat in Neptune Group's Living Point project at Bhandup (W). Suraj is getting transferred from Bangalore and bought the flat for personal use and not as an investment. He says Bhandup is a central location with connectivity both on the western and eastern line. This would help my working wife and me. He further adds, builders today are negotiating where earlier their attitude was 'take it or leave it.' I could have waited and rented a house but chose not to do so. The stock market crash means values of portfolios have come down and there could be a price correction in real estate but I wanted a ready possession flat without any risks involved. I have found a suitable flat on the 15th floor with a good view where I can live comfortably for the next 25 years.
Elaborates Devang Trivedi, MD, Progressive Group, the segment buying today includes people belonging to the shipping industry, those living in the Middle East or people who have sold their property at good rates and are now looking at buying a slightly bigger one. Then there are those who have to buy property from a tax perspective. There are also those who are quite well to do, and are not bothered even if the prices go down marginally, so long as they are getting a strategic location or a vastu compliant home. This customer feels that if he lets go of this, he will not get the strategic opportunity.
Trivedi continues, there is also a segment looking at opportunity buy. They are ready for a down payment and will strike a good bargain by approaching five to ten developers asking for a particular price. The deal will be done with the builder who, depending on his financials will give them the best price. Opportunity buyers are like investors looking at profit money. They have made money in the stock market, they see that the gold market will eventually correct, since it is a commodity. They will have to finally put their money in real estate or fixed deposits. Fixed deposits would not give that kind of money or appreciation, so they will invest in real estate. They will do value buying and rent it out for some time.
There are also certain long-term investors who are looking at five years down the line. They are looking at a lower price today and getting something unique like say a sea-facing flat or garden facing flat, two apartments combined. These would not be easily available when the market goes up. When the market goes up, he can sell higher. These are buyers with an enterprising outlook.
There are also some properties, which are easily liquidable. For instance flats where there is a ready buyer in the same or adjacent building. The customer only has to find another flat to move into. Suppose he has bought his flat at Rs 60 lakh and is selling at Rs 53 lakh, he can somewhere down the line, put that money in a project that is worth much more for an attractive price.
According to Gulam Zia, national director advisory services, Knight Frank India, the buyer finalising a purchase today may be looking at getting something ideal, say a super luxury apartment at Cuffe Parade or else is looking at buying for his personal use. There are also those who believe that a home loan now would make sense with interest rates peaking and reduced EMIs.
Ramesh Bijlani, director, Ekta Supreme Housing says there are buyers who are actively looking at buying a house for their personal use, since the prices are not going down as they had anticipated. Home buyer S Ramadorai, running an IT company has booked a 3BHK apartment in the Lake Homes Project of Ekta Supreme at Powai says, he has been shopping around for the last one year and has seen prices only rising.
The last one month however has seen some freebies being offered. He went in for this project as it offers good value in terms of open spaces, amenities besides being close to his place of work. Confesses Ramadorai, I have in the past lost money in stocks and in commodities but never in real estate.
Price corrections may be there but there would not be a rundown. Hence customers feel they might as well talk to a builder and negotiate the rates. At the same time, they know that a good builder will deliver his promise, says Bijlani.