Gurgaon real estate is mainly investor-driven
Gurgaon- Real estate in Gurgaon is emerging mainly as an investor-driven market wherein the investors can make high profit in short span of time. Many investors are of the opinion that no bank or other financial institutions can reap benefits as fast as the realty sector.
For instance, if there is a new project launched in Gurgaon with per unit cost of Rs 2 crore, and an investor would have to pay around Rs 20 lakh an upfront amount (10 percent of the unit cost). Within six months time, the price of the property increases, and the resale value of that unit rises by Rs 200-300 per square ft. So an investor can sell the unit at that rate, getting a profit of Rs 10-12 lakhs, which he can use it for investment in another new project. If an investor can hold it for long time, he would end up getting even more profits.
Presently, there are more than 300 residential projects in Gurgaon and several more are on the way. Investors investing in Gurgaon market include first-time or second-time home buyers as well as leading players too.
Real estate analysts observe that initially when a project is launched, the appreciation of that property is mainly investor-driven but later it varies based on demand-supply ratio at that time and it is mainly an end-user driven market.
Generally, investors have ease to liquidity as the investors group is comprised of businessmen, HNIs, industrialists and other private individuals. But the end-users are from the middle class and are dependent on bank loans for financing their home price requirements and can only put down the initial 10-20 percent as the booking amount.
Investors are more interested in investing in new launches as they can reap more profit while buyers mostly look to invest in ready-to-move-in properties as the price-hike is not seen often. Experts say that many builders often keep increasing the prices of newly launched properties in order to attract investors.
The real estate growth in Gurgaon is highly investor-driven, said experts. Total number of sales of properties done on Sohna Road last year was less (occupancy was less). But it has started rising gradually in the past one year. When a project is launched, the price movement is faster within the first 2-3 years from the launch and usually sees a 40-50 percent appreciation but after reaching a benchmark it stops.
Developers are coming up with schemes and innovative ideas in order to increase sales. Growth is observed in assured return schemes offered for under-construction properties where 9-12 percent returns are offered.
Some developers are inserting lock-in clauses in their buyer agreements, which restricts the initial buyer from selling the property on the secondary market for a specified period (usually 3-4 years) or till physical delivery of the unit has been provided to him.
In some deals, developers make an agreement with investors as per which they will only buy back the units from investors at pre-agreed prices. This scheme avoids primary market being affected by the secondary market prices. In case the investors decide to quit at lower prices, it has an adverse effect on sale of other unsold units of the same project at prevailing market rates.
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