Property punting picks up pace
Flats Are Being Sold Like Hot Cakes; People Trying
To Make Quick Money
Bangalore: It’s like
in the stock markets. The 3-year upward spiral in property
price has begun to encourage ordinary folk to speculate in
Earlier this month in Bangalore, the 3,000
up-market apartments offered as part of an integrated township
project was entirely booked in less than a week. People from
the day the project was launched swamped the property developer’s
office, and the developer was compelled soon to make a public
announcement that there were no more flats to be had, in order
to stop the continuing rush.
The phenomenon is not unique to Bangalore.
An official of a global property consultancy says projects
in Gurgaon with flats valued at Rs 1 crore each have been
booked within a week. “Everybody’s buying 2-3
flats,” he says.
The strategy is simple: Pay up the initial
installment, which is a fraction of the total flat cost, for,
say, three flats. The point at which you are unable to pay
an installment, sell one of the flats to make the necessary
payment. When a payment issue arises again, sell yet another
flat. The assumption is that property price would continue
to rise and a tidy profit would be made with every sale.
“This kind of vulture speculation
is higher than normal today,” says Chanakya Chakravarti,
joint managing director of property consultancy Cushman &
“We have had people coming to us wanting
to book as many as 30 flats. We don’t encourage speculation,
so we decline such requests. But there are others who entertain
such booking,” says Jackbastian Nazareth, vice president
in sobha Developers.
But is it creating a potentially risky speculative
bubble? When it become necessary to sell the flats, will the
property punters find buyers?
“The property market is still very
vibrant. There is a lot of genuine investor interest as well.
But investors need to keep their eye on the ball,” says
Ankur Srivastava, managing director of property consultancy
DTZ Debenham Tie leung.
Experts say investors should look closely
at a property’s location, pricing and credibility of
the builder and designer before putting in money. “I
may not buy something in Bangalore’s south-eastern corridor,
where prices appear to be nearing a peak. But the northern
corridor and Whitefield still look very promising,”
There’s also near unanimity among experts
that the emerging integrated townships hold a lot of potential,
since they provide all support system an urban professional
looks for, from security to schools and retail/ entertainment
facilities. “A good integrated township will definitely
find end user,” say Mayank Saksena of Chesterton Meghraj
In Bangalore, the 3,000 up- market
apartments offered as part of an integrated township project
was entirely booked in less than a week. Projects in Gurgaon
with flats valued at Rs 1 crore each have been booked
within a week with many buying 2-3 flats.