Prices in prime South Delhi market have fallen by almost 30 percent over the last one year and you can negotiate discounts and freebies. It is not just builders that are willing to lower prices but even high net worth individuals (HNI) and investors who are looking to dispose off their assets in this slowing economy.
For instance, in a recent sale of flat on a 500 square yard plot in Kauz Khas Enclave was sold for Rs 8 crore. The market rate a year ago was Rs 12 crore.
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Santhosh Kumar, CEO- Operations, Jones Lang LaSalle India says: "At this moment it is definitely the buyers market. They have the great bargaining power, if they have the capability to make the upfront payment because today the cash is king. If the buyer wants to get a good price negotiation and they have the scope to negotiate with the land owners or the owners of the properties because we can see how the inventories at this moment are really going high and various options are available."
The South Delhi property market is made up primarily of builder flats which still a few months ago were trading north of Rs 7 to Rs 10 crores a piece. This space is occupied not so much by established Pan India players but by local builders like Salcon, Utpal and Saluja's.
What typically happens is a family or a land owner enters into an agreement with one of these builders to develop what a commonly known as builder floors. The number of floors depends on the plot size.
One of the worst hit areas in South Delhi is the posh Defence Colony. Brokers say flats on a small 217 sq yard plots are being quoted for more than Rs 6 crore and in excess of Rs 7.5 crore for ground floor apartment or the top floor with terrace. This would have cost you Rs 9 to 11 crore a year ago. The starting price of a flat on a bigger plot size of 325 sq yards today is Rs 9-11 crore and that would not have come for less than Rs 13 crore a year ago. We spotted dozens of these new floors lying vacant for want of buyers.
The story is same in Vasant Vihar which is considered even more upscale than Defence Colony. Investors like Vasant Vihar as properties could easily be put on rent. But brokers say the situation is different today.
Prices have fallen for 2,000 sq ft apartment from Rs 12-14 crore to Rs 10-12 crore. Even other South Delhi colonies like Greater Kailash, Panchsheel Park, New Friends colony are seeing the pain.
Santhosh Kumar says: "Areas like Vasant Vihar, Panchsheel or Greater Kailash I& II, Saket these are some them where plenty of supplies are there that are coming into the market and what we have seen is that there are unorganized developers who are ready to sell their properties or which has been developed in these colonies even at a lesser price because they do not have the ability and the capability to hold on to these properties for long time."
Here is a word of caution before you choose to invest.
Santhosh Kumar says: "They need to be aware of what is happening in the market and some of the transition, very recent transition they should be aware of before negotiating the prices. They need to look at the background of the developers and the builders. Secondly, whatever the commitment they are going to get from the developer or the owners and needs to be very well documented and proper due diligence needs to be made before they enter into any kind of agreement with the seller."
This much is clear that we are in the midst of the buyers market and the final discount depends completely on your negotiating skills. But builders are also offering freebies this festive season and it is not just gold coins and modular kitchens that we normally hear about. This is what is offered not just in South Delhi but also in neighbouring Gurgaon and Noida.
Santhosh Kumar says: "We have seen people offering lesser discounts, giving cars or there maybe another flats in our tier II locations they are offering at lesser prices. So those kind of incentives, in addition to aggressive promotions they are doing, giving them free vouchers, free foreign travels, giving them motor cars and all that, these are some of the freebies which they are offering to the clients."
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