Redevelopment of 800 city buildings to bring 10,000 flats in market
Scarcity of land in the city is forcing builders to opt for redevelopment projects; developers claim it's a win-win situation for them and homebuyers
This newspaper has learnt that over 800 buildings in the city are either being redeveloped or are in the process of securing approval for redevelopment. This means that there would be about 10 to 12 houses up for grabs in the market from each of the projects, taking the final count to about 10,000.
Sources in the realty sector claimed that this is happening after a long time and almost on a daily basis five housing societies - most of them located in the suburbs - are inviting tenders for redevelopment. Arvind Goel, a builder, said, “Redevelopment is a win-win situation for everyone. As developers do not have to buy properties, they save money and interest they will have to pay in buying open plots.
Secondly, occupants of a housing society, who currently stay in smaller dwellings, will get bigger apartments. So redevelopment is the best way to construct houses.” Goel, however, claimed this would not bring down the existing realty prices by a great extent. “It would be difficult to say whether rates would go up or come down, but they would definitely become competitive and to an extent become stable for homebuyers, as there would be stock in the market for them to buy,” he said.
Another realtor Prakkash Rohera claimed that because there is scarcity of land in the city, builders are left with no option but to redevelop existing societies and buildings. Rohera said, “There are so many buildings in the city that are in bad shape and need urgent redevelopment. This is financially a better option for a builder because he doesn’t have to purchase a land. All he has to do is only give rent and corpus to the existing society members. This if calculated empirically is lesser than what the builder will have to shell out for buying land.”
Several realtors claimed that opting for houses in redeveloped projects would help buyers in many ways. Rohera said, “When a buyer opts for a house in a redevelopment project, he’s assured that the builder has already signed a Development Agreement with the society and will complete the project on time as mentioned in the contract. Or else he has society members to deal with. The biggest complaint of homebuyers is that they don’t get possession on time. Today, not only the middle-level builders but every top builder is opting for redevelopment.”