Janapriya Engineers Syndicate chairman K Ravinder Reddy said that the builders community must work together without any differences and safeguard the realty sector from the UDS (undivided share of land) and prelaunch schemes. Speaking exclusively to Real Estate Guru at his office in Banjara Hills on Friday, he suggested that the UDS should focus on how to ask the government to address the issue of pre-launches. He said that all the real estate developers associations were working together to rectify the mistake committed by some builders. He also questioned how the industry would survive if rates in Hyderabad were skyrocketing that people could not afford to buy any property. Therefore, it was suggested that everyone should come together and understand what the people want and make an effort to build affordable housing projects. Excerpts from his interview…
If the UDS and prelaunch schemes continue any further, genuine buyers will not come forward to buy the properties. This is one of the reasons why sales have been declining for some time now. However, with the Real Estate Guru focusing exclusively on this issue, some builders are hesitating to launch UDS and prelaunch projects. This problem can only be solved if all the construction community comes forward and works together. Unfortunately, builders who took up UDS or prelaunch projects feel that they have done nothing wrong and are unable to realise the adverse impact of their actions on the industry and eventually on themselves.
Buyers of UDS and prelaunches are mostly investors. Though there were investors in the past, they used to purchase flats in a bulk from the builder. If he is constructing 400 flats, the builder used to sell 50-60 flats at lesser price to these bulk buyers in order to pool some capital for taking up the construction work. The investors sold flats after the project is completed and earned profits. This arrangement had no adverse impact on anyone. Investors purchased flats projects constructed by reputed builders who had adequate experience in construction sector and had past history of delivering the properties as per schedule.
But things are entirely different now. Only small investors are buying one or two flats at a lower rate. The bigger problem is that these small investors are not waiting to sell their flats until the project is completed. If the builder sells flats at Rs 5,000 per sq.ft, these investors are trying to dispose off their properties for a lesser price and competing with the builders, thereby destroying the builders. Considering huge price difference, utter confusion is prevailing among genuine buyers who want to purchase properties in a particular project. Any person wants to purchase a property for a lesser price. Under these circumstances, though the builders are quoting genuine price, the customers are of the opinion that the price was higher than the market price. Thus, the genuine buyers are postponing their plans further. As a result, it is causing damage to developers as well as those who have already bought properties in such projects and raising doubts whether the project would be completed.
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