Times Of India reports
CHENNAI: 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.
CHENNAI: 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.
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