Chennai may have been hit by the recent floods and poor sentiment has delayed the process of recovery in the real estate market. However, this unfortunate situation has highlighted some developers because of their product strength and innovative development. What is surprising is that there is a silent revolution taking place in some quarters which escaped the traditional analyst’s radar.
There are two sections of developers who are defying market gyrations even in the current scenario. One, those developing affordable housing segments, limited housing development with broader amenities can be done in a better manner. Housing finance companies and banks are driving the demand with their financing.
For affordable housing, areas such as Oragadam, Mahabalipuram and Tirumazhisai are providing competitive land pricing which enables such developers to price their products so they area acceptable to home buyers. Recently, a developer was able to sell 150 apartments in two days of launching which clearly indicates the surging demand for such units.
In fact, the developer has been successful in implementing similar products in multiple locations. Out of 5,000 units, 2,500 units have already been handed over, 1500 units are under varying stages of implementation and 1,000 units are in the planning stage.
Contrary to perceptions, the margin in such products is not unfair but the developer is sitting quite pretty in the current depressed market scenario. In fact, the developer is looking out for more areas for development with emphasis on connectivity and transport facilities.
The premium segment may have been hit, as reported data estimates the dip by 36 per cent year-on-year in the city. But the perception of home buyers is different. Even today, there is good demand for products with a range of amenities. Smaller developers with inherent desire to bring in the best products and amenities in the industry to home buyers seem to be winners.
An up-and-coming developer could sell a premium product in Thiruvanmiyur without any marketing effort as he could provide value for money in his project. It is not the imported materials that add value to the project but the way in which every inch of space has been judiciously utilised for the benefit of home buyers that tilted the balance. “Price was the last item that was discussed in the project by home buyers”, said a senior executive of the company while narrating demand for such products.
These may be isolated instances but such products and developers amply reveal that there continues to be a growing demand for the right pricing and the right product at all times.
Source V Nagarajan Magic Bricks /Times of India