By Ubaid Parkar
A 2 BHK flat is an aspiration but as has been seen for the past few months, the so-called “affordable” housing segment have been content to offer a 1 BHK inventory or even a nightmarish 1 Room Kitchen. With budget housing the new buzzword ringing on the doorways of developers justifying market research to provide homes to low income population, the 2BHK option for the middle class masses is still a distance away.
Tata Housing Development Company Ltd. announced a township in Boisar spread across 63 acres which is meant for the industrial population there. Housing Development & Infrastructure Ltd (HDIL) very recently announced its joint venture with Mumbai Metropolitan Region Development Authority (MMRDA) for developing over 500 acres of land under a rental housing scheme at Virar. Nirman Group announced “Nano City” for 250 flats at Neral near Karjat at the start of the year. And the much discussed Maharashtra Housing & Area Development Authority’s (MHADA) 3863 flats which generated over 4 lakh applicants was the signature for the decree of low cost housing.
It is a bandwagon effect. With the elections concluded and the stock market buoyant, developers still feel that the revival has a distance to travel. An optimistic outlook towards the revival has been placed in the post-Diwali period. Unfortunately low cost housing translates into constricted spaces and sprawls of 1000 sq. ft. will not head the crown of the real estate outlook.
It is said that the Real Estate sector is waiting for the boom period. For whom? If the prices are tumbling, although not by much as developers cuddle up to their rates like an infant with a teddy, is it not beneficial for the consumer to be king and negotiate without having the feeling of being held hostage?
Pratik Ajinkya, a team manager, purchased a flat in February 2008 in Kandivali (E) which belonged to an investor. The terms: Rs 5500 per sq. ft. plus Stamp Duty and Registration Fees to be compensated for. The only negotiation was a revised rate of Rs. 5400 per sq. ft. “The building which I stay in has 100 per cent occupancy currently and there was not much of an opportunity for a negotiation back then.”. He added, “The rates in my area have frozen now for last year or so and have shown no signs of dropping.”
Ishika Bhasutkar who is employed in the services sector booked a flat in Mira Road in February this year. She said, “The initial deal was at a total cost of Rs. 12.75 lakhs. After a little running around a broker offered it at Rs. 12.60 lakhs and then after a bit more helter-skelter the flat was eventually settled at Rs. 12.45 lakhs by the developer themselves. Their negotiations were very casual and were not giving any serious consideration.”
Furthermore, there has been a drop in the interest rates for housing loans and has been much widely reported, a reiteration is in store. Financial institutions are wooing in people to try and attract potential home buyers. So much so that it resulted in a war of words between SBI and HDFC. ICICI has recently reduced its home loans by 0.5 per cent.
The manufacturing sector has taken a big hit and Steel and Cement prices have tumbled, two of the most widely used components utilized in the construction of a home, ensuring the cost of production for developers does not rise. It has been hard for developers but this has been due to their speculative transactions and their luxurious flats having no real takers. Optimism has been dug up from inquiries alone.
It is the ideal time for buyers to be in the driving seat and corner rates to their appropriation. Because once the “boom” begins it will back to square one as property rates will skyrocket and so will the egos and hostilities of developers.
By Ubaid Parkar