PUNE: For those looking to buy a property in the fringe areas of the city, now is the right time. The demonetisation move and the impending Real Estate Regulatory Act (RERA) have prompted a few leading and many small-time builders to drastically reduce the price of their housing units in the city’s outskirts to evoke renewed interest among potential buyers.
A leading developer with a project coming up at NIBM annexe has brought down the selling price of 2BHK flats to Rs 31 lakh per unit now from Rs 50 lakh a few months ago. And this developer is not the only one, many others too with housing projects in Undri, Moshi, Wagholi, Pirangut and Katraj-Kondwa Road have resorted to heavy price cuts to lure buyers. Many of them are now offering 2BHK flats for as low as Rs 35-39 lakh.
“Dearth of enquiries about our new project prompted us to reduce the selling price. We are now offering 2BHK flats at a price of Rs 35 lakh per unit against Rs 51 lakh a few weeks ago,” a sales officer of a builder from NIBM annexe told media. Not just new projects, old projects too are feeling the heat of the cash crunch that has gripped the economy after the demonetisation move.
“The fear of cancellations always remains. With the impending RERA and an expected cut in interest rates, the sales in the sector have come to a screeching halt,” a sales officer of a project in Hadapsar said.
As the realty prices move southward, the buyers too are adopting a cautious approach. “There is no doubt that now is the right time to invest in the realty sector. However, there are indications that the prices may come down further. So, we will just have to wait and watch for now,” Vikas Tiwari, who was in talks with a builder to buy a flat in Undri, said.
The same was shared by Akansha Gopal, who has been looking to buy a flat in Wagholi. “After the demonetisation move, the flats that were earlier priced at Rs 40 lakh have now come down to Rs 30 lakh. We are hoping that the rates might drop further,” she said. To sustain in the current situation, experts have repeatedly said, small-time builders will have to reduce the rates. “The small-time builders will have to cut rates to sustain or else they would perish,” Samantak Das, chief economist & national director of Research at Knight Frank India, said.
“The velocity of sales, especially in the premium market and the resale segment, will be affected,” he added. Meanwhile, head of research at JLL Ashutosh Limaye said the small-time builders are bound to face problems owing to the prevailing liquidity situation. “However, it is too early to say anything as most buyers have now adopted the wait-and-watch approach,” he said.
Word Of Caution
People planning to make most of the situation have been advised to check all the documents to ensure the validity of the project before making any investment.
Credai president (Pune Metro) Shantilal Katariya said some small-time builders with their projects in the fringe areas may be selling unauthorized structures for low rates. “Once the RERA rules comes into force, builders indulging in unauthorized constructions will not be allowed to sell these units. So, people need to thoroughly check the permissions granted to the projects they plan to invest in,” he said.
In the fringe areas of the city, the Pune Metropolitan Regional Development Authority (PMRDA) has already initiated action against unauthorized structures with the filing of five FIRs against errant builders in the last two weeks. PMRDA officials said RERA would protect the consumers from the prevalent opaque and fraudulent practices in the sector.
Credits ET Realty