Your dream home may cost more

Normal 0 false false false EN-US X-NONE X-NONE /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:auto; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} As realty sector is abuzz with action, developers are hiking prices across housing segments – bethey affordable housing, mid-segment or luxury apartments and villas. VivekShukla reports Areyou looking for your very own house in NCR? If you at the job for the last six-sevenmonths or so, then you would have known that developers have hiked prices oftheir products across segments. There is increase of price in affordablesegment, mid-segment and luxury segment. The reasons are varied but there is nodenying the fact that as realty sector witnesses a flurry of activity frompossible buyers and investors after a long lull, developers are increasingprices. While, Gurgaon is witnessing the maximum hike, the hike is not thatsharp in Noida and Ghaziabad.    A recent report prepared by PropEquity also clearly indicates that developersare hiking rates of their projects. According to the report, Gurgaonhas seen up to 30% hike in prices in luxury segment – no other city of NCR has seensuch a sharp hike in this segment. There is also a hike even in affordablesector too, PropEquity reports after comparing rates of July 2009 and January2010.    Can developers justify so much hike on their flats? “Not at all,” says VishalAnand, MD of Brick and Mortar Global Realty, adding, “The greed of developersdoesn’t seem to end. They should not hike prices of their products to suchastronomical levels. They (developers) are building another bubble, which canbe detrimental to Indian real estate. There is a demand and developers shouldbe patient and increase prices gradually, which would build confidence in thelonger term.”    Harinder Sikka, director of Raheja Developers, says that real estate market inimportant cities of the country has picked up in a major way, riding stronglyon actual end user demand. Investors have also started trickling back in themarket. Whenever demand exceeds supply, prices head northwards. This is simplemarket dynamics. Sikka, however, made it clear that if prices are artificiallyhiked without actual demand being present, the project sales will sufferconsiderably.    However, a senior official of Ansal API has a different take on this matter.According to him, there are two reasons for the price hike. During the periodof economic slowdown, companies had brought down prices, even below their costprices in many projects in order to unwind their inventories and improve theircash flows. Companies were under pressure to pay their lenders, vendors as alsoto complete projects and hence came under pressure on one side, while theplunge in demand almost dried up their cash flows. Now that market conditionshave improved, companies are only trying to recover their costs. He also saysthat one has to remember that developers have bought land at exorbitantly highprices when market was up, which has led to high prices of apartments.     NCR-baseddevelopers have increased prices by almost 25-30 % in the last 9-10 months. RajatMahajan of Integrated PanRealty Solutions says that Noida has so far not seenthis trend due to tough competition amongst new names entering real estatemarket. He also feels that another bubble in the market is in the offing asboth end users and investors are back in the market. Projects in all ranges –affordable, midsegment and luxury – are selling fast as there is a lot ofspeculative interest in the market. “I would advise investors and end users toinvest in projects of reputed developers who have proven track record ofdelivery,” he concludes.    Market watchers are also concerned that even the so-called affordable homes arenow costing more. They are becoming almost unaffordable. For instance, budgethomes in Faridabad, Ghaziabad and Gurgaon have gone by 8%. An earlier reportfrom PropEquity claims that rates of affordable homes have seen 11.20% hike inGurgaon, 9.70% in Faridabad and 4.90% in Ghaziabad respectively. However, rateshave not changed in Noida, Greater Noida and Delhi.    Samir Jasuja, CEO of PropEquity, says as the realty market is improving after along lull, some developers have hiked prices in order to make a marginalprofit. He feels that serious customers should not wait to book their homes.They should see the past track record of a realty firm and pace of constructionthat is taking place. If on both fronts they are happy, then they should booktheir home.    Meanwhile, some realty experts are surprised by the fact that though there hasbeen no increase in construction cost, realty firms are still increasing theprice of their affordable homes . They say that rates have seenclose to 15% jump as most of the developers have been able to offload theirinventory and are trying to gain from current momentum. Courtesytimes property dtd. 19/02/2010 Formore information about real estate, real estate india, Indian real estate,property, property consultant, property in india, Indian property, propertyinvestment option, investment in real estate Log onto http://www.propertycafeteria.com/ And http://www.zameen-zaidad.com/

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