Investors tread path of caution
Price correction in metros has started spilling over to tier II destinations too. One suchOne such is boiler town Trichy, where buyers too have started negotiating on prices. A change in their mindset is reflected not only in terms of postponing their property purchases, but the end-users are seeking price revisions upto 15%.
"As builders, we are seriously facing a problem with buyers, adopting a wait and watch policy. They are cautious in making their final decision," Tiruchirapalli Flat Promoters’ Association (TFPA) president M Siddharth told ET. TFPA has now 70 members in its fold, of which 55 are active.
Endorsing TFPA chief’s view is Rohini Group promoter MV Maruthachalam, who says this is the first instance in the realty history of the fast-growing tier II destination, that there is a tendency among prospective buyers to negotiate on prices.
Though builders are not keen on a price reduction, the influence of price correction in cities has caught on to buyers in this part of the country. "While customers are looking at 10-12% price reductions, builders have given discounts up to 5%," he said.
Mr Siddharth, who is also the KVM Housing promoter, says while he has not announced any price revision, there are builders who have given price discounts of 10-15%.
Boasting of good health, education and hospitality infrastructure, Trichy, the fourth largest city of Tamil Nadu, has caught the attention of developers from neighbouring areas too. If one were to look at some of the reports by Feedback Ventures and Jones Lang LaSalle Meghraj, Trichy has evolved as a destination with the demand for quality housing picking up from 2007 onwards.
Some of the top-notch realty players in the boiler town include Rohini Housing, Vignesh Flat Promoter, Manghalam Estates, Ganesh Builders. So far, the highest sales have been notched up by Manghalam, which has sold apartments for Rs 80 lakh while Rohini has sold for Rs 70 lakh.
So, from a property market dominated by local players, developers from Chennai and other areas too are exploring real estate business opportunities.
Residential property markets are concentrated in the airport road, Tanjore road, Bypass road, Thilai Nagar, K K Nagar, Samayapuram temple town and Cantonment areas. Property appreciation has taken place in Samayapuram, which has lured several top-level retirees, NRIs and ex-military officials, says a long-time resident.
Apart from NRIs, Trichy’s buying profile includes IT staff, local businessmen and bank staff. A substantial portion of the purchases is through the housing loan route, with SBI playing a major role. Other names in this segment are ICICI and Sundaram Home.
Mr Maruthachalam said there are about 75 ongoing projects undertaken by several developers. Normally, the project development is done on 2-10 grounds (1 ground = 2,400 sqft). Of late, developers are evincing interest in the Crawford area on Madurai road.
South India Shelters from Chennai is awaiting approvals to launch its multi-storied complex beyond Crawford. Similarly, after launching its 112-apartments in Puttur for Rs 2,000 per sq ft and marketing it for even Rs 3,000 per sq ft, Rohini has lined up a project in the Crawford Colony that would cover 16,000 sq ft area.
Work on the two-phase Puttur project began in November 2008 and this would make available 32 apartments at a price of Rs 2,250 per sq ft.