Desperate times call for desperate measures and that holds doubly true for real estate developers in Chennai. First, the already sluggish property market took a hit thanks to the Chennai floods. Then, the sector’s arsenal of discounts, freebies and offers failed to attract home buyers, with sales dipping 36% year-on-year. Faced with such challenges, developers in the city are now being forced to trim the sizes of luxury housing projects to make them more affordable.
Turning Luxury Housing Affordable
These moves comes a year after developers rushed to take advantage of amended Coastal Regulation Zone (CRZ) norms that permitted sky-rise buildings along the East Coast Road (ECR). Many of them believed that the market here would draw a lot of investor and home buyer interest, and bought large tracts of land to launch luxury projects only to find demand practically non-existent. Now Chennai’s developers have no option but to convert these projects into more affordable units to attract demand.
“The inquiries have definitely slowed down quite a bit. So what we are doing is resizing all of this into the affordable segment. We don’t dilute the facilities offered, but instead of offering a 4,000 or 6,000 per sq. feet apartment, we reduce the size to 2,000 or 3,000 sq. feet.” claims V Suresh, managing director of Real Value Promoters.
Sky-high Homes at Earth-bound Prices
The accompanying change in prices is massive with properties that were being marketed at Rs 12 crores now selling for Rs 75 Lakhs. And the strategy seems to be working with demand rising and many other developers looking at ways to redesign their projects.
“We had a similar challenge in 2007-08 when the Chennai markets had really gone down. So we re-engineered our luxury villas project into group housing. I think that paid a lot of dividends and we could move a lot of inventory on that.” says Vineet Relia, managing director of SARE Homes
Experts say it will take at-least 2 or more years for the luxury housing segment in Chennai to revive. Until then, it is Chennai’s home buyers who hold all the cards by being able to pick and choose projects in the city’s poshest areas, at a fraction of the original price.
Smitha TK, Reporter, NDTV