Apartments are preferred spaces to inhabit in rapidly urbanised pockets. From being apartments of convenience, these spaces now provide all kinds of facilities that one can think of in the upper bracket. Astro strategist Hirav Shah does not restrict himself to large builders and developers. He is equally committed to problems of small and medium developers. He is a pro in finding solutions for unsold properties, given his business and corporate experience. What’s more? His solutions are highly customised.
There are products and services for which a market has to be created. Similarly, there are products and services for which markets already exist. As they say in Hindi, roti, kapada aur makaan are the basic requirements of any individual. So, there exists constant demand for makaan or housing or land for that matter.
Real estate industry includes demand and supply of all kinds of land, housing and commercial properties. There was a time when most individuals or families lived in individual houses. The concept of apartments was alien to them and cities and towns had limited population.
However, thanks to urban development and increasing population, there was dearth of land in cities and houses gave way to multi-storied buildings which housed more than two to three families. And with rapid urbanisation and explosion of population, smaller apartments led to bigger structures and eventually led to gated communities. Gated communities are ecosystems where communities co-exist and thrive on the lines of a miniature city. They are self-contained and have various amenities for their occupants, like gardens, play areas, gym area, supermarket, a common club house and various other facilities.
Of late, there are some who are reverting to villas or independent houses, within or outside a gated community. But the concept of hi-rise apartments has caught the fancy of the new-age families. Nuclear and flush with funds, most modern families find the concept of apartments totally attractive and commercially viable. A high-rise, like a gated community has multiple apartments. While it does have common areas and exercise facilities, not all utilities are available despite the high cost.
Apartments come in various sizes and forms in various parts of the world. In fact, apartments are called flats in some parts of the world, while they are called units in some others. Apartment blocks can be single to multi-storeyed and could be owned by individuals or developers which are then let out to individuals or people.
Similarly, there are different types of apartments across the world, such as studio apartments, garden apartments, loft apartments, penthouse, communal apartments and serviced apartments. Studio apartments have a large single room, are usually built on the top floor of an apartment block and have a kitchen and bathroom.
A garden apartment, seen commonly in the US, has the luxury of having its own garden space.
Loft apartments were a craze during the mid 20th century and these large apartments often found in abandoned high-rise warehouses and factories were fancied by artists and those with a bohemian lifestyle.
Then there is the penthouse, which is an apartment that is found on the top of an apartment block or high-rise building. They differ from studio apartments as penthouses are usually large apartments and considered to be a symbol of luxury by many.
Communal apartments are common in Russia, where five to six rooms have a common kitchen and bathroom. Each room has its own front door.
Lastly, there are the serviced apartments. Again these could be apartments in small apartment blocks or high-rise apartments. They have all amenities provided by a service agent and fall into the luxury category. Of course, serviced apartments are also provided by companies to their employees, which are more utility-oriented, and may or may not be luxurious.
Today, sky’s the limit for the kind of facilities that occupants can enjoy in high-rise apartments. In a world obsessed with green energy, the builders are also turning their buildings ‘green’ by using clean and green energy.
Given the variation, one can expect apartments being sold like hot cakes in varied budget packages catering to different strata of buyers.
Is reality same as estimation?
Well, sadly no. Various factors influence the buyers and this can impact the business of any large, medium or small realty developer. Just to have a fair idea, India Real Estate Market Update Q1- 2020 – Residential, released by JLL India, across the top seven cities, developers are sitting on unsold inventory worth Rs 3,70,000 crore at the end of March 2020.
Unsold inventory increased from 4,42,228 units in Q4 2019 to 4,55,351 units in Q1 2020. Also, Mumbai surpassed Delhi NCR in terms of unsold inventory.
■ For starters, there could be unsold inventory that is a real-time problem for most developers or builders. They might start off a project with high estimates and could end up in trouble for not second-guessing the market.
■ The overhead costs for the builder or developer can shoot up whilst he is developing the project. This can adversely affect the revenue margins.
■ Various socio-economic and political reasons could lead to decline in the market. For smaller players, their target customers may not have sufficient money to finalise a deal. In case of large developers, it could be due to various reasons from market fluctuations, recession, change in exchange rates, etc that can lead to fall in sales. This results in unsold inventory.
■ Of late, the trend is to provide various additional facilities, from an AC to dining table to furniture sets to providing fancy amenities like green power, etc, when it comes to selling an apartment. Despite all the marketing strategies and gimmicks, unsold inventory could still be a major issue for developers or builders.
There are various other common reasons for unsold inventory, when it comes to apartments:
1) It’s overpriced.
2) Construction next door. While this cannot be avoided in most cases, this could be a major reason for unsold inventory as buyers do not fancy an apartment ‘without a view’.
3) The maintenance or common charges are too high
4) This one’s pretty important. Expect unsold inventory if your building has pending lawsuits.
5) There are too many apartments for sale in the building. This is not a good sign as this raises many doubts in the mind of the buyer. Similarly, if the apartments are too few, this too could lead to unsold property as apartment buyers do not want to buy a place that has been discarded by others.
6) In a time and age, when just about anything and everything is being provided to the buyer based on their budget line, an apartment block without any special features will end up having unsold inventory. For example, a bland construction style could deter many from investing in a property.
7) At times, other property owners stall certain transactions by word of mouth as they want the prices to remain attractive. Lower price sales are not encouraged.
8) Brokers could ruin some deals, thanks to their over enthusiasm or lack of enthusiasm. The lure of higher brokerage charges could make them swing either ways.
Astro-strategist Hirav Shah has a solution for unsold apartments
Yes, having a dream property is the vision of any human being. But the demand-supply curve is not always upward, when it comes to apartments. There are many ups and downs in the graph and this is widely accepted in the industry.
A builder or developer might enter the market with great expectations, but the reality might hit him hard in the form of unsold inventory.
Astro strategist Hirav Shah deals specially with cases of unsold inventory. He feels having the right vision and right strategy is important to tide over imminent problems. His advice is to get to the solution in a systematic way, rather than base one’s gullible estimations on misguided information from industry consultants. While Hirav Shah is not against consultants, he points out that one glove doesn’t fit all.
Each problem has its intrinsic issues and these have to be dealt with carefully and patiently. Astro strategist Hirav Shah has been in the business of advising realtors for many years. He knows the realty business in and out and can provide solutions that are completely customised, irrespective of whether you are a large, medium or small developer or builder.
The term astro might make one cautious as no one wants to be fleeced by astrological mumbo-jumbo. However, Hirav Shah being a practical and pragmatic man, he gives advice based on a builder or developer’s personal chart. He clearly chalks out a timeline for them, so they do not end up spending money at wrong times.
This not only saves money for the builders and developers, it also helps them plan for revenues.
Astro strategist Hirav Shah creates a road map for builders and developers with regards to unsold inventory, which becomes a practical guide for them.