Chennai, B’lore lead in sales
The southern cities account for over 45% of the total housing sales noted across leading cities; NCR prices decline NOW BOOK AN APARTMENT ONLINE
Housing sales and new project launches saw a marginal dip in the first half of the year, although the rate of decline slowed down substantially over the same period last year. According to CBRE’s India Residential Market View for the first half of 2015, home buyer demand declined marginally by around 2% over that of the second half of 2014 across India’s leading cities — largely as a consequence of cautious buyer sentiment, high mortgage rates and significant unsold inventory in primary as well as secondary markets.
The southern markets of Chennai and Bangalore saw positive demand for residential real estate, accounting for more than 45% of the total housing sales noted across leading cities. This was primarily concentrated in the high-end/mid-end segments of the two cities. Housing sales saw a steep decline in the Delhi National Capital Region ( NCR), however, adversely impacting property prices in the region. The residential markets of Mumbai and Hyderabad, meanwhile, noted a slight drop in home buyer interest levels during the first half of the year.
Owing to subdued market sentiments, new project launches declined marginally by about 3% in the first half of 2015 over the second half of 2014. Most new housing projects were launched in the high-end/mid-end segments, primarily concentrated in the secondary and peripheral markets of the respective cities.
Commenting on the findings of the report, Anshuman Magazine, chairman and managing director of CBRE, South Asia Pvt Ltd said, “The overall market outlook remains optimistic as the Government continues to focus on rejuvenating infrastructure to support large-scale affordable housing development. These are crucial steps that can revive sentiments in the housing sector. The Housing for All initiative, along with revival of major urban infrastructure projects and removal of impediments to land acquisition, can in unison reap rich dividends for the sector in the long term.”
Bangalore emerged as the most preferred residential market, accounting for almost 27% share of the entire supply of new housing projects, while Delhi NCR and Mumbai garnered a share of about 20% each during the period. On a half yearly comparison, Chennai and Hyderabad saw a rise in new project launches, while Delhi NCR and Mumbai saw a dip in new launches due to already existing housing inventory and project delays. Locations such as Gurgaon and Noida Extension in Delhi NCR; the extended western and eastern suburbs in Mumbai; the north-eastern and south-eastern corridors in Bangalore; OMR Road and GST Road in Chennai saw significant residential project launches during the first half of 2015.
“Although the Central Bank did implement monetary easing during the first half of the year, the actual impact on mortgage rates has been far less. However, further measures of monetary easing and reduction in mortgage rates can have a positive impact on housing sales across the country,” said AS Sivaramakrishnan, head – residential services India, CBRE South Asia Pvt Ltd.
Pricing trends in the residential real estate market remained diverse, varying across segments and neighbourhoods of leading cities during the first six months of 2015. Home prices remained largely stable in the premium and high-end/mid-end segments of Mumbai, Chennai and Kolkata during the first half of 2015; while Bangalore saw a price rise due to a marginal increase in housing demand.
Meanwhile, Gurg aon’s Sohna Road (NCR) saw home prices decline by 5% to 6% due to a supply overhang, while remaining stable across other locations of Gurgaon and Noida. Golf Course Road and Greater Noida Expressway also saw a marginal decline in pricing in the premium housing segment. Raheja Developers have joined the online bandwagon and have booked over 1,600 affordable housing units within two months, 500 of them online.
“Customers themselves prefer to beat the rush and book online within 10 minutes, whereas offline the whole process takes a few hours. Also if the units are being sold at fixed prices, consumers do not fish around in the market for discounts etc.
“BookMyHouse supported us in the backend creation of the transaction portal and cost of sale was negligible compared to the huge costs that we incur usually,” says Nayan Raheja, ED, Raheja Developers.
Tata Value Homes, a 100% subsidiary of Tata Housing quipped with smartphones and web-based applications, finding properties for self-use has now become easier for consumers. The entry of real estate portals in the buying space has provided a new window of opportunity, cutting through the monopolistic control that local brokers enjoy within the micro-markets. This way consumers come out as winners, also as a result of the competition of pricing that these portals bring.
Some of the well- known development fir ms are now showcasing their projects on e-commerce sites and offering online booking of properties directly. In the future, the rest of the real-estate development community is likely to follow the trend and open their Development Company, also held its first online exhibition for an exclusive audience through a valid invite code. Commenting on this online extravaganza, Brotin Banerjee, MD & CEO of Tata Housing Development Company says, “We at Tata Housing, place our consumers at the focus of our operations. Our online platform has received an overwhelming response from our consumers with over 1,500 booking till date. Though it was started as an experiment, it has now emerged as the fastest growing channel of sales for the real- estate industry.”
Very recently, Tata Housing launched an integrated payment gateway to allow customers to make their entire home purchase online.
The transaction process
The process is like a typical property purchase, but with a small difference: here, one needs to pay an initial token amount to book the property through the portal, and the remaining t ransaction i s done offline. As per industry insights, the initial booking amount is considered as an ‘ expression of interest’ or ‘ intent of purchase’, and is usually considered as part of the initial 10 per cent that the consumer pays to the developer to book the property. While the booking may happen at ease, documentation still exists outside the purview of the site owner or the property portal. So, while one needs to pay a certain booking amount to the portal, the buyer would still need to meet the developer’s representatives to fix the final payment and complete documentation.
Just like any other item purchase, one needs to inform the portal
Potential benefits to the consumers
There are some direct advantages in booking a property online. While it provides more options, it can also ease the allotment process. Paying the booking amount can help ensure that a buyer gets the property of his/ her choice. Moreover, a portal provides deeper reach and enables comparisons amongst projects available across the country, facilitating ease of decision making for buyers.
However, the entire process could be seen as an addition to the number of already existing steps in buying property. Thus, for ease of business, the portals need to integrate all services, from property search and submitting of documentation to the registrar’s office to final payment through a single window or under one platform.
Portals typically provide basic information on projects such as location, payment