Around 300 buyers seeking to exit the DLF Garden City project converged at the DLF office on Saturday evening (28 March 2009) and refused to leave until DLF agreed to refund their money.
Homes for 5 to 10 lakhs
Yes, you read it right. Five Lakhs to Ten Lakhs is the range.
Following Real Value Neel Kamal and Provident Housing CosmoCity, it is now the turn of Unitech to offer low cost apartments. Unitech proposes to offer housing options in the range of Rs.5-10 lakhs. On a related note – the next step in this quest among builders to offer low cost housing, will probably be to take the Laurie Baker route.
To know more about the project and related note on “Laurie Baker route”, read Unitech plans to offer apartments for Rs.5-10 lakhs
DLF is not a bank
DLF has started making refunds to buyers on a case-by-case basis. Buyers say that around 561 have submitted letters seeking exit from the project. But DLF says..
DLF Spokesperson :
“This is not a current account that you put in the money and withdraw whenever you want to.”
Read more at : DLF starts refunds ; 561 of 1800 in queue, say buyers
Even when existing players are finding it hard to sell their inventory, Hyderabad’s BSCPL is launching a mega township of 4500 residential units, named Bollineni Hillside, very near DLF Garden City. The size of the project and the location would likely draw comparision with DLF Garden City project.
It seems only DLF did not factor the changing economic scenario, reducing costs of construction and lowering interest rates, when it had fixed the prices for its projects. They sited those reasons when they made a price cut recently.
All other builders were wise enough to forsee the problems and had priced their projects right. Some go to the extent of suggesting that reducing the prices can only result in reduced quality and hence they will not reduce prices in their projects.
Justifying the need to retain old prices seems to be a problem at hand for the builders. Either they need to come up with convincing answers on why they will not reduce the prices or they will have to bite the bullet.
Read about what some builders have to say..
ET now reports that despite the rate cut announced by DLF for its Garden City project in Semmanchery (near OMR, Chennai), the buyers are considering the exit offer from DLF.
One of the buyer seems to have commented on the TOI article “Builder slashes apartment prices on OMR” (which reported the price cuts), says that “GC google group members core demands have not been met and also this reduction is not even close to bangalore and hyderabad DLF projects. Everybody had expected atleast 20% from the soft launch price. Disappointed and will exit from the project.” (read comment on ToI)
According to buyers, the 13-month inordinate delay and launch of the project without proper sanctions had driven many away. DLF’s recent mail to the buyers claims to have got the DTCP approvals and that it will start the process of signing Apartment Buyers’ agreements very soon. It also claims that it can complete the construction by April 2011, as was initially planned.
The article is available at :
Earlier Blog Post :
DLF reduces apartment prices in Garden City, OMR !!
This is exciting news, which is going to have further repercussions in the real estate sector in Chennai (and of course India).
The Times of India reports that..
Shaking up the city’s realty market, DLF on Monday announced a hefty price cut, ranging from Rs 3.6 lakh to Rs 12.6 lakh, for its residential project Gardencity – on the Old Mahabalipuram Road (OMR).
It would benefit existing as well as new customers, said K K Raman, executive vice president, DLF Chennai. The builder has introduced four price slabs, three for old customers and one for new entrants. Those who booked apartments during the soft-launch of the project, at Rs 2,800 per sq ft, would get a discount of Rs 300 per sq ft. The new price for those who booked at Rs 3,000 per sq ft last year is Rs 2,550 per sq ft. The maximum discount of 18.75 per cent Rs 600 per sq ft has been given to those who booked at Rs 3,200 per sq ft between August 2008 and February 2009. The price for new customers is Rs 2,650 per sq ft; the price will hold till May 31, 2009.
While the minimum savings on the smallest apartment 1,200 sq ft at Rs 300 per sq ft works out to Rs 3.6 lakh, the maximum benefit for the largest apartment 2,100 sq ft at Rs 600 per sq ft is Rs 12.6 lakh. This is also the highest price cut announced for an ongoing project by any promoter in Chennai after the economic crisis set in. Significantly, the promoter has also decided not to collect any interest for delayed payment from existing customers.
Speaking about reasons for taking such a drastic step, Raman said: “With unprecedented events in the world economy affecting the real estate sector here, bringing changes in input cost and interest rates, DLF went back to the drawing board and created further efficiencies. These benefits are being passed on to consumers.”
DLF entered Chennai’s residential sector with a bang in January 2008 by announcing the biggest project of 3,493 apartments spread over 53.5 acres in Semmanchery, 2 km off OMR. Its soft-launch made headlines with close to 2,200 people booking flats in less than two weeks. All major empanelled realty consultants were in the race for clocking the maximum number of bookings for the project. Three months later, when the formal launch happened, several hundred customers opted out, perhaps anticipating the market downturn in the months to follow. The DLF sales team took several months to make up for those cancellations. Currently, the project has about 1,800 bookings in the first two phases.
Ramesh Nair, MD, Jones Lang LaSalle, an international realty consultant, said: “DLF’s price revision could drive up demand for the project as it becomes more affordable for home buyers. It will also lead to most developers reducing their unit sizes and building specifications apart from reconsidering their pricing strategy.”
At least half-a-dozen residential projects on OMR, in which private equity funds, mostly foreign, have been parked on a pre-agreed condition that sales will be effected at a minimum price of Rs 3,200 per sq ft, will be affected by the DLF move. Also, customers who had booked apartments in other ongoing projects on OMR at higher prices could apply pressure on their builders. In short, a price correction for properties on the much-hyped OMR is perhaps underway.
The article is at..
Apartment rates may indeed become more affordable !!
This also shows what the new gen collaboration tools can make happen. This reduction in prices in DLF Garden City seems to be due to negotiations between existing buyers and DLF and probably was prompted after more than 600 threatened to pull out of the project, of which 100 people actually proceeded to do so. For more details visit this thread..