Affordable Housing at NH-24 and NH-58
Slowdown Force Developers To Look For Affordable Housing Between 16 lakh to Rs 30 lakh in NCR
To beat slowdown in the economy, which has affected the demand for premium segment houses, developers have shifted focus to affordable apartments in the range of Rs 16 lakh to Rs 30 lakh in the National Capital Region of Delhi. This, combined with fall in interest rates, has lowered the cost of ownership of a house considerably.
The current trend has given a good opportunity to middle-income endusers to buy a house. Developers have also launched a number of projects in the affordable price range in areas like Indirapuram, Vasundhara, Vaishali, Crossings Republik on National Highway 24, Raj Nagar Extension on NH-58 in Ghaziabad, Nahar Paar area in Faridabad, Greater Noida and Gurgaon.
In Raj Nagar Extension on NH-58, in particular, condominiums have been launched where two-bedrooms apartment of 1,000 sq ft are being offered in the price range of Rs 16 to Rs 20 lakh. At the current home loan rate
of 8%, the EMI on a loan of Rs 15 lakh for 20 years will work out to Rs 12,500.
Similarly, in other areas also, apartments are being offered at Rs 2,000 to Rs 2,500 per sq ft. To make houses affordable, developers are now building two-bedroom apartments of the size of 800 sq ft to 1,000 sq ft. Until some time ago, the base model of a two-bedroom apartment used to be of 1,200 sq ft to 1,500 sq ft floor area.
The reduction in size of the apartment led to substantial fall in the cost. In fact, the net cost of a two-bedroom has declined by almost 50% because of the combined effect of reduction in per sq ft price and the size of the apartment. Earlier, the cost of entrylevel two-bedroom apartment of 1,200 sq ft at Rs 2,800 per sq ft used to be around Rs 33 lakh. But, now, a similar apartment is available for Rs 16 lakh.
Till the first half of 2008, builders used to sell two-bedroom apartments on the outskirts of NCR in the price range of Rs 2,800 per sq ft to Rs 3,500 per sq ft. The prices of new projects in the same area have fallen to Rs 1,800 per sq ft to Rs 2,500 per sq ft.
At the same time, as interest rates have also fallen from 11% to 8%, the EMI on similar apartments, which could be taken as cost of ownership, has come down from Rs 34,000 to Rs 13,400 only. However, new apartments will certainly not have similar specifications like marble flooring and modular kitchens, which were being offered in the earlier apartments.
But, the reduction in the specification has improved the affordability of a buyer. Experts say such specifications could be added in the apartments later also, when one can afford them easily.
Apart from this, many builders have offered special schemes to improve the affordability of buyers. A number of developers are asking for only 15% to 20% as down payment and asking the buyer to pay the rest of the amount after two years when possession of the house will be given. Such schemes save buyers from simultaneously paying rentals of their existing houses and EMIs for their new houses.
Many people are still not buying houses because of the uncertainty in job market. Because of the slowdown, many companies are resorting to job cuts. This has worsened the situation. Developers are trying to address this problem also. To counter this, some real estate companies have offered to pay EMI for six months to buyers, if the buyer or his/her spouse were to lose his/her job. The logic for this is that within that period the buyer/spouse may get another job.
As inflation slips down further, the chances of interest rates too falling further are high. Besides, to revive the demand in economy, government is determined to bring down interest rates in the system.
In fact, interest rates have fallen to an all-time low in developed economies. The trend is likely to continue for some more time. Therefore, it is advisable for a buyer to go for floating rate interest rates to benefit from the fall in interest rates in future. However, they should remain alerts and as soon as interest rates start to firm up, they should shift to fixed rate of interest rates.
In the present scenario, consultants say the endusers instead of waiting to buy at the lowest level, should take a plunge if they get a good bargain. Instead of waiting for the so called `right time to buy', which is almost impossible to catch, buyers should bargain for a `right choice'.
Source: Economic Times
To beat slowdown in the economy, which has affected the demand for premium segment houses, developers have shifted focus to affordable apartments in the range of Rs 16 lakh to Rs 30 lakh in the National Capital Region of Delhi. This, combined with fall in interest rates, has lowered the cost of ownership of a house considerably.
The current trend has given a good opportunity to middle-income endusers to buy a house. Developers have also launched a number of projects in the affordable price range in areas like Indirapuram, Vasundhara, Vaishali, Crossings Republik on National Highway 24, Raj Nagar Extension on NH-58 in Ghaziabad, Nahar Paar area in Faridabad, Greater Noida and Gurgaon.
In Raj Nagar Extension on NH-58, in particular, condominiums have been launched where two-bedrooms apartment of 1,000 sq ft are being offered in the price range of Rs 16 to Rs 20 lakh. At the current home loan rate
of 8%, the EMI on a loan of Rs 15 lakh for 20 years will work out to Rs 12,500.
Similarly, in other areas also, apartments are being offered at Rs 2,000 to Rs 2,500 per sq ft. To make houses affordable, developers are now building two-bedroom apartments of the size of 800 sq ft to 1,000 sq ft. Until some time ago, the base model of a two-bedroom apartment used to be of 1,200 sq ft to 1,500 sq ft floor area.
The reduction in size of the apartment led to substantial fall in the cost. In fact, the net cost of a two-bedroom has declined by almost 50% because of the combined effect of reduction in per sq ft price and the size of the apartment. Earlier, the cost of entrylevel two-bedroom apartment of 1,200 sq ft at Rs 2,800 per sq ft used to be around Rs 33 lakh. But, now, a similar apartment is available for Rs 16 lakh.
Till the first half of 2008, builders used to sell two-bedroom apartments on the outskirts of NCR in the price range of Rs 2,800 per sq ft to Rs 3,500 per sq ft. The prices of new projects in the same area have fallen to Rs 1,800 per sq ft to Rs 2,500 per sq ft.
At the same time, as interest rates have also fallen from 11% to 8%, the EMI on similar apartments, which could be taken as cost of ownership, has come down from Rs 34,000 to Rs 13,400 only. However, new apartments will certainly not have similar specifications like marble flooring and modular kitchens, which were being offered in the earlier apartments.
But, the reduction in the specification has improved the affordability of a buyer. Experts say such specifications could be added in the apartments later also, when one can afford them easily.
Apart from this, many builders have offered special schemes to improve the affordability of buyers. A number of developers are asking for only 15% to 20% as down payment and asking the buyer to pay the rest of the amount after two years when possession of the house will be given. Such schemes save buyers from simultaneously paying rentals of their existing houses and EMIs for their new houses.
Many people are still not buying houses because of the uncertainty in job market. Because of the slowdown, many companies are resorting to job cuts. This has worsened the situation. Developers are trying to address this problem also. To counter this, some real estate companies have offered to pay EMI for six months to buyers, if the buyer or his/her spouse were to lose his/her job. The logic for this is that within that period the buyer/spouse may get another job.
As inflation slips down further, the chances of interest rates too falling further are high. Besides, to revive the demand in economy, government is determined to bring down interest rates in the system.
In fact, interest rates have fallen to an all-time low in developed economies. The trend is likely to continue for some more time. Therefore, it is advisable for a buyer to go for floating rate interest rates to benefit from the fall in interest rates in future. However, they should remain alerts and as soon as interest rates start to firm up, they should shift to fixed rate of interest rates.
In the present scenario, consultants say the endusers instead of waiting to buy at the lowest level, should take a plunge if they get a good bargain. Instead of waiting for the so called `right time to buy', which is almost impossible to catch, buyers should bargain for a `right choice'.
Source: Economic Times