New Delhi: With interest rates rising, speculators are increasingly staying away from investments in the real estate industry. Sensing a slow down, developers are now focusing on tweaking their offerings to mid-segment buyers. For instance, real estate developer BPTP recently launched a new project called “Floors” at Faridabad. But this time it has priced its offerings in the Rs 25-Rs 35 lakh range. These prices would have been unheard of just a few months ago.
BPTP is not alone in its focus on the mid-segment buyer. As the real estate industry struggles to find buyers, builders such as Omaxe, Parsvnath and Unitech are also looking at launching projects that are smaller and much cheaper than before.
Alpha G Corp. CEO SK Sayal says that speculators have gone away from the market. “As a result, one sees a correction in valuations,” he says.
Amit Raj Jain, VP- Marketing, BPTP says that according to a market feasibility study they did before launching his new real estate project, they found there were fewer buyers for the premium category. “We are not launching properties in the premium category and and are launching only in mid price categories. As speculators have been driven away we expect that most buyers will only buy smaller and cheaper homes,” he says.
Jain says that this time around, he is also constructing lesser number of apartments to begin with than earlier as he wants to be sure of sales. He says that the slowdown is also affecting initial bookings. “While earlier we would have been able to close a sale in a day now it takes upto 6-8 days for the same,” he adds.
The over supply in the market is also a problem and in a shrinking market, the last thing needed is a glut.
Anshuman Magazine, CEO, CB Richard Ellis, India says that he expects a lot of supply to come into the market. “With slowdown, we expect most developers to launch smaller projects and also phase their projects more. This is a very price sensitive market, so we expect new projects to come in at lesser prices,” he says.
For middle class families looking for their own abode, this could be a good time to house hunt. That is, if the soaring home loan rates don’t keep them away.