Akshaya, Estancia, Lancor,Doshi increase price

Chennai: At a time when flat purchasers are feeling the pinch of the steep increase in interest rates, some of the leading builders in the city have announced hikes in their prices ranging from Rs 100 to Rs 500 per sq ft.
Over the past two months, eight leading builders have increased prices. In actual terms, the increase in the cost per apartment ranges from Rs 1.5 lakh to Rs 7.5 lakh.
Among the biggest players, Estancia, the joint-venture project of Arun Excello and L&T, where 2,000 apartments are on offer, the price has increased from Rs 3,450 to Rs 3,950 per sq ft for the first 12 floors and from Rs 3,950 to Rs 4,450 per sq ft for the floors above that. Akshaya Homes has increased the price for the ‘Adora’, a 200-apartment project on the Old Mahabalipuram Road, from Rs 4,000 per sq ft to Rs 4,300 per sq ft and for ‘Metropolis’, a 480-apartment project on the Grand Southern Trunk Road, from Rs 2,800 to Rs 2,950 per sq ft.
Justifying the hike, Akshaya CMD T Chitty Babu said, “In the past one year alone, the cost of inputs for construction has increased by Rs 400 to Rs 450 per sq ft. So far, we have absorbed that shock. The cushion has melted. Now, it has reached a stage where we are forced to pass on the burden to the buyers. However, the hike in the price has not hit our business. Our average sales per month continues as usual,” he said.
Other builders who have hiked prices recently are Lancor, ETA Star, Doshi Housing, Alliance Infrastructure, Indus and Arihant. While most of them are doing apartment projects, Alliance is doing an independent villa project near Porur, for which, the cost has gone up by Rs 7 lakh per unit.
Prakash Challa, president of the Tamil Nadu unit of the Confederation of Real Estate Developers’ Association of India (CREDAI) said, “Builders are finding it difficult in the present scenario. Along with the increase in the cost of inputs, banks are refusing to fund projects. The delay caused by the regulatory agencies in giving clearance for the projects also contributes to the increase in the cost of construction. Unless the government steps in to do something drastic like controlling the prices of cement and steel, the industry cannot survive.”

But there are still some who are buying property

The steep hike in the interest rates in recent months has not dampened the spirit of Chennaiites looking for their dream apartments.
If the loan disbursements of major players in the housing finance sector like HDFC and LIC Housing Finance are of any indication, there has actually been a 30-50% increase in business in the past four months compared to business in the corresponding period last year.
LIC Housing Finance CEO RR Nair told The Times of India, “In Chennai, as against an average loan disbursement of Rs 80 crore per month last year, we have done Rs 120 crore per month this year. However, the investors and speculators have taken a back seat. The end users are the ones who pick up apartments now though the rates are high. For them, it is a question of shifting from a rented house to their own home.”
These buyers are mostly in the salaried class, and in their late 20’s or early 30’s. Apart from owning a house, they also seek the income tax exemption given on the interest and principal repayment on housing loans.
HDFC has recorded a growth of 35% in the past four months compared to the corresponding period last year, said sources in the bank. The average loan disbursement per month has gone up from Rs 130 crore to Rs 170 crore.
A senior official of the bank said, “It is too early to gauge the actual impact of the recent hikes in interest. It will be evident only over the next six months. In July, there was a fall of Rs 20 crore compared to June. If there is a further hike in interest over the next month, the business might take a severe beating.”
Over 50%of HDFC’s business is contributed by the IT sector and the balance by banking and manufacturing sectors. This year, many IT companies gave very low increments to their employees. “That might affect our business too in the coming months,” he said.
It is interesting to note that there is a significant increase in the number of people who opt for old apartments. “In the past two months, we noticed that this segment is growing by 3–4%,” said another official in HDFC.
Also there is a fall in the number of people who buy their second or third apartment. It was quite natural for people with high disposable income to buy more than one flat till recently. But with the interest rate showing no sign of a fall, they are now guarded.

4 Comments

  1. Uday,

    What is your opinion on Hiranandani Upscale for dual purpose of investment/living? How is the infrastructure development around that area? What other big projects on OMR would you recommend based on your experience? Thanks,

  2. I would say dont invest in any project in OMR. i feel purva is better bet and any project priced around 3000 and away from OMR is good.

  3. Baskar

    Building strong but basement weak avoid this and say now we build be safe

  4. Baskar

    I would like to buy flat in estancia. Tell your comment

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