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DREAM BUY: Waterfront apartments in Kochi that command premium prices are in high demand.

In the first quarter of 2008, the mismatch between demand and supply was nearly a million sq. ft. It is yet to be fathomed whether the greed among builders or lack of enthusiasm among buyers is the root cause. However, builders neither have cut prices nor offer any discount.

If the real estate scene in the tech city is not heart-warming, how is the sector doing in some other cities of South India?

According to Snehal Mantri, Director of Mantri Developers, the residential segment is moving slowly in cities such as Chennai and Hyderabad. “Consumers are waiting and watching for the prices to fall or stabilise,” she says. However, both the cities are warming up to the idea of luxury flats and there is a huge demand for such projects from local residents as well as non-resident Indians, she says. In Chennai, the demand for commercial property is on the upswing, says M. Vedanarayanan, representative of a builder. For any finished product, there are immediate takers, he says but hastens to add that the demand is more for rentals than outright purchases. Unlike their forefathers, youngsters in these cities yearn to have their own abode early in their life, he says. Like buyers in any other city, they too look for the best developer who delivers on time with quality and value for money.

“Our Mantri Synergy project on Old Mahabalipuram Road, Chennai, is in full swing. The price is Rs. 3,890 per sq. ft. onwards and the response is very good. The residential property rate has stabilised here. Software companies which are expanding in these cities have also contributed to the surge in demand besides NRIs living abroad,” says Ms. Snehal.

However, another industry insider says that Chennai builders are struggling to get clearances from the Chennai Metropolitan Development Agency (CMDA) for both commercial and residential projects totalling over 50 million sq.ft. Projects announced a year ago are in a limbo as CMDA is yet to give clearances for them. This has badly hit the builders as many of the projects are funded by private parties.

“If there is delay in completing the project, it hits the returns. If CMDA, the governing body for approvals, doesn’t clear the projects immediately, it will further affect the construction industry,” he says.

In Hyderabad, the area around thenew Rajiv Gandhi International Airport is attracting huge investments. The real estate prices have gone up by several hundred times and many mega projects, both commercial and residential, are coming up in the area.

“Buyers in Hyderabad look for quality. They are ready to pay more. Though the demand is steady now, it will go up in the near future. Earlier, the real estate boom was IT-driven, but now the property demand is from a cross-section of society,” says Mr. Vedanarayanan. “We are yet to launch our Gachibowli project. The prices will be in the range of Rs. 4,000 to Rs. 4,500 per sq. ft.,” says Ms. Snehal.

Kerala, which has been the favourite destination of tourists, is waking up to new realities.

The fast-changing lifestyle coupled with disposable incomes has created a huge demand for property. The younger generation has become more conscious of its living standards and is demanding the best for itself.

Waterfront property is in huge demand in Kochi. Builders also say that they command premium prices and sell like “hot cakes.” A super-luxury apartment complex, which is coming up on Marine Drive in Kochi, will have 400 apartments and a three-bedroom flat may cost over Rs. 3 crore, adds Mr. Vedanarayanan.

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