Column: Property queries
(DNA 15/08/2006) Mumbai - Why are property prices going through the roof? Is this realistic or a bubble? Currently, real estate prices are end user-driven. For instance, residential development is led by individual buyers buying their first homes.
Salaried buyers are at an advantage now because of easy funding by banks, and so are developers. Developers are, therefore, able to construct and develop more projects. In the residential sector, the price boom is a phenomenon that literally feeds itself.
Prices in commercial development are rising because of the difference of demand and supply. At present, there is a very large demand and the supply is not able to keep the pace with it. This naturally makes available real estate expensive.
We are witnessing an all-round game in profitability and pricing by landowners and developers—the resulting costs are passed on to the end users. This is a demand-led rise and the percentage of investors in this market is very low. Speculative investors are scarce in the market, so there seems to be no indication of a ‘bubble’.
How much can one bargain while buying a flat? Or, by what percentage will builders raise the bargain while making a deal?
The seller, sometimes, refuses to bargain on the stated price. But there are ways to get around it.
And a careful survey and appraisal of the place is important before sitting down to negotiate. Your best bet is to agree with everything the seller states in favour of the price, then state your case in a normal tone of voice.
Enumerate the drawbacks of location (non-availability of public transport, schools, shopping centres, etc.) and of the property itself (leak in the living room ceiling, dangerous wiring, etc.). If he still refuses to consider your counter offer, give him your contact number and ask him to call you back.
Do not get into a full-scale argument.You could also offer an immediate down-payment to prove your intention to purchase the property.
Most of the time, the seller is in a hurry to be paid because he is insecure about the possibility of losing the deal. By offering a deposit, you prove your sincerity and open the way for further negotiations.
By Anuj Puri, managing director, Trammell Crow Meghraj Consultants
Salaried buyers are at an advantage now because of easy funding by banks, and so are developers. Developers are, therefore, able to construct and develop more projects. In the residential sector, the price boom is a phenomenon that literally feeds itself.
Prices in commercial development are rising because of the difference of demand and supply. At present, there is a very large demand and the supply is not able to keep the pace with it. This naturally makes available real estate expensive.
We are witnessing an all-round game in profitability and pricing by landowners and developers—the resulting costs are passed on to the end users. This is a demand-led rise and the percentage of investors in this market is very low. Speculative investors are scarce in the market, so there seems to be no indication of a ‘bubble’.
How much can one bargain while buying a flat? Or, by what percentage will builders raise the bargain while making a deal?
The seller, sometimes, refuses to bargain on the stated price. But there are ways to get around it.
And a careful survey and appraisal of the place is important before sitting down to negotiate. Your best bet is to agree with everything the seller states in favour of the price, then state your case in a normal tone of voice.
Enumerate the drawbacks of location (non-availability of public transport, schools, shopping centres, etc.) and of the property itself (leak in the living room ceiling, dangerous wiring, etc.). If he still refuses to consider your counter offer, give him your contact number and ask him to call you back.
Do not get into a full-scale argument.You could also offer an immediate down-payment to prove your intention to purchase the property.
Most of the time, the seller is in a hurry to be paid because he is insecure about the possibility of losing the deal. By offering a deposit, you prove your sincerity and open the way for further negotiations.
By Anuj Puri, managing director, Trammell Crow Meghraj Consultants
posted by InCar Group Press Room at 18:38
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