Condos (aka Flats) looming tall from various corners are a recent phenomenon in Kerala. 
Twelve years ago, condos were few and far between and the demand in sync was quite dull – the asking price for a two-bedroom condo in an up-and-coming neighborhood in Kakkanad bordering Thrikkakkara was around 5L (~$10K). Since then, the market changed significantly and the demand peaked around late 2007 with builders boldly selecting buyers based on their resident status (e.g. NRI – Non-Resident Indian), high net worth individual, etc. The mindset of the people also changed with condos becoming the preferred choice for some instead of a single family home. The sizable NRI population of Kerala has helped accelerate the trend, with their buying completely into the better security concept promoted by marketers.
Historically, condos went for less than half that of what single family homes commanded with comparable square footage and a smallish yard. In the 2007 market-peak, when pricing fluctuated based on builder reputation and branding, there were instances where a condo’s cost easily exceeded that of a comparable single-family home in the same neighborhood. It was normal to see standard two-bedroom Kakkanad flats going for 50L (~$100K). Since then, the market has settled, although pricing has managed to remain flat.
The impression we got in early 2010 from interactions with agents was that while there were many options available, there was a certain level of desperation in getting the properties to move – the builders are feeling the pressure of overbuilding in the previous years without slowing down, when the economy skidded:
We also ran into a casualty of the slow down during our research phase: Nitesh Wimbledon Gardens epitomized the growth in Kakkanad flats with their announcement of a huge project a while back. On contacting them through the online inquiry form, the automated reply stated that the project was deferred.
For information sake, we did briefly stop by builders such as Olive (best location right in front of Infopark but quality well below par) and also attended the CREDAI real-estate event that we blogged about previously. Our take away was that this is very much a buyer’s market with choices aplenty.
It is useful to be aware of special charges and taxes encountered when purchasing a condo. Below is a look at the different charges in addition to the Base Selling Price (BSP) one might encounter, for a representative property on the 15th floor facing the pool area with an explanation of each such charge:
Payment schedule varies by builder. It is normal to have a sliding scale with payments of 10-15% due based on construction progress deadlines. Financing the home is fairly easy if you hold a job, although interest rates are upwards of 8.5%. Repayment period is normally between 5 and 15 years and up to 85% of the value of the home can be financed easily. Tax benefit comprises of a deduction of between Rs 30K and Rs 1.5L from income based on some conditions – both principal and interest may be deducted. Fixed and Variable Interest Rate Loans are both available and sometimes teaser rates followed by a higher fixed rate are also offered.
Summary & Recommendation:
The Skyline Ivy League project location is ideal as the site overlooks the area earmarked for Smart City. This huge Kakkanad flat project has an impressive model home with attention to detail shining through as a differentiating factor. For those on the lookout for a 3BR flat from a reputed builder in the Kakkanadu area, this is a very good choice. The final paperwork for the Smart City Project is signed as of 02/2011 and that should give this project a huge boost, especially among investors.
The DLF New Town Heights project is the biggest by far. Location is good, right on Seaport-Airport road, the hub of recent developments in the area, and near the Civil Station – long-term, this may turn out to be a disadvantage as the road will get extremely congested once the construction in the area gets done. This Kakkanad flat project has gone through several pricing adjustments – the proposed launch price was as high as Rs 3500 per square feet but the market conditions forced them to have a soft launch with pricing at Rs 2350 in 2008. The pricing was adjusted up to Rs 2500 in mid-2009, to Rs 2800 in early 2010, to Rs 3200 at the start of 2011, and to Rs 3500 in September 2011. They also announced release of the Signature Tower with several exclusive features (Full Air-Conditioning, Exclusive Pool, Modular Kitchen, etc) priced at a whopping Rs 4800 psft. The first two towers (U and V) of Phase II of the project was announced in early December 2011 but the pricing is not yet set - the towers have 2BHK and 2BHK+S units with square footage at 1250 and 1356 respectively. Overall, we found this project to be of good value and to their credit they are a publicly listed company with a good reputation as a national builder.
Sahara Grace has the best location, away from the bustle of Civil Station Junction overlooking the Chitrapuzha River on Seaport-Airport road. Their Base Selling Price was the highest among the Kakkand flat projects we looked at, at Rs 3000psft - water body facing units are priced at Rs 3300psft. The few potential downsides with this project were:
03/2012 Updates:
Skyline IVYLeague: The sixth and final tower Cornell is launched at Skyline IVY League with a scheduled handing over date of 2013 December. The handing over dates of the first four towers (Yale, Sylvania, Harvard, and Columbia) have slipped to 2011 December. Pricing has increased by 20% to a Base Selling Price (BSP) rate of Rs 3100psft from Rs 2590 in mid-2010. There is very limited availability in the first four towers. For the last two (Princeton and Cornell), there is more availability subjected to phased launch schedule.
Sahara Grace: Sahara Grace delivery dates have slipped substantially. The projected delivery date for the first two towers (B1 and B2) is indicated to be end of 2012 as opposed to 2011 that was indicated when we talked to them in mid-2010. They also launched a new tower (A3). Pricing has not changed (Rs 3000psft and Rs 3300psft depending on whether it is water-body facing). The first two towers are nearing completion, but given the slippages, it is tough to feel confident about their new delivery dates. The project continues to move at a snails pace. Their recent marketing mailing indicate a price increase is forthcoming.
07/2012 Update:
DLF New Town Heights: The project has slipped and now expects handover to start by EOY-2013. The saving grace is that the construction agreement includes a provision for the builder to pay the client at a rate of Rs 5psft/month for every month of delay from the standard 30-month agreement - also, there is an optional supplementary agreement that allows for this rate to be double (Rs 10psft/month). Overall, the project is making very good progress - the towers A through Q are launched and work is proceeding at a rapid pace. The availability is limited as 95% of the inventory in the launched towers are sold - an alternative is to wait for the launch of towers R through V, although there is a risk for further price increase, if you go that route. The pricing has already increased from Rs 2350psft in mid-2008 to the current rate of Rs 4000psft (TBE November 1st 2012). The parking rate has increased from Rs 2.5L to Rs 3L and Club Charges from Rs 57000 to Rs 1.57L. DLF claims this project as the most appreciated on-going project in the area.
Related Posts:
Twelve years ago, condos were few and far between and the demand in sync was quite dull – the asking price for a two-bedroom condo in an up-and-coming neighborhood in Kakkanad bordering Thrikkakkara was around 5L (~$10K). Since then, the market changed significantly and the demand peaked around late 2007 with builders boldly selecting buyers based on their resident status (e.g. NRI – Non-Resident Indian), high net worth individual, etc. The mindset of the people also changed with condos becoming the preferred choice for some instead of a single family home. The sizable NRI population of Kerala has helped accelerate the trend, with their buying completely into the better security concept promoted by marketers.Historically, condos went for less than half that of what single family homes commanded with comparable square footage and a smallish yard. In the 2007 market-peak, when pricing fluctuated based on builder reputation and branding, there were instances where a condo’s cost easily exceeded that of a comparable single-family home in the same neighborhood. It was normal to see standard two-bedroom Kakkanad flats going for 50L (~$100K). Since then, the market has settled, although pricing has managed to remain flat.
The impression we got in early 2010 from interactions with agents was that while there were many options available, there was a certain level of desperation in getting the properties to move – the builders are feeling the pressure of overbuilding in the previous years without slowing down, when the economy skidded:
- Many major development initiatives in the area were delayed well past the projected dates, and
- It was still unclear whether some of the high profile projects such as Smart City and Hi-Tech City (Maradu - about 12 km away) will ever become a reality.
Skyline Ivy League: A huge project on six acres – around 700 condos in six towers. Pricing was Rs 2590 (~$55) per square feet. The quoted delivery date was 2011 August. Plans – 1BR 1050 sft, 3BR 1600 sqft, and 4BR 1800 sqft. Availability was limited with the 4BR completely sold out. There was availability on the 3BR condos and very limited availability for the 2BRs. - DLF New Town Heights: This is the biggest residential project in the area on 26 acres – 1774 condos in 20 residential towers. Pricing was Rs 2800 (~$60) per sqft. The quoted delivery date was 2012 December. Plans – 2BR 1100 sqft, 2BR+Study – 1250 sqft, 3BR – 1600 sqft, 3BR+Utility – 1750 sqft. Availability exists although units are released in phases that could mean waiting on the builder to release the plan and location one is seeking.
- Sahara Grace: Another huge project on 14.72 acres – 728 units in 14 towers. Pricing was Rs 3000 ($66) per sqft. Project delivery date is phased on tower basis with the earliest delivery quoted as late 2011. Plans – 2BR 1183 sqft through 3BR 1788 sqft (eight different plans with some sporting a large private patio space). As with DLF, units are available although waiting on the builder to release the plan and location one is seeking is the norm.
We also ran into a casualty of the slow down during our research phase: Nitesh Wimbledon Gardens epitomized the growth in Kakkanad flats with their announcement of a huge project a while back. On contacting them through the online inquiry form, the automated reply stated that the project was deferred.
For information sake, we did briefly stop by builders such as Olive (best location right in front of Infopark but quality well below par) and also attended the CREDAI real-estate event that we blogged about previously. Our take away was that this is very much a buyer’s market with choices aplenty.
It is useful to be aware of special charges and taxes encountered when purchasing a condo. Below is a look at the different charges in addition to the Base Selling Price (BSP) one might encounter, for a representative property on the 15th floor facing the pool area with an explanation of each such charge:
Payment schedule varies by builder. It is normal to have a sliding scale with payments of 10-15% due based on construction progress deadlines. Financing the home is fairly easy if you hold a job, although interest rates are upwards of 8.5%. Repayment period is normally between 5 and 15 years and up to 85% of the value of the home can be financed easily. Tax benefit comprises of a deduction of between Rs 30K and Rs 1.5L from income based on some conditions – both principal and interest may be deducted. Fixed and Variable Interest Rate Loans are both available and sometimes teaser rates followed by a higher fixed rate are also offered.
Summary & Recommendation:
The Skyline Ivy League project location is ideal as the site overlooks the area earmarked for Smart City. This huge Kakkanad flat project has an impressive model home with attention to detail shining through as a differentiating factor. For those on the lookout for a 3BR flat from a reputed builder in the Kakkanadu area, this is a very good choice. The final paperwork for the Smart City Project is signed as of 02/2011 and that should give this project a huge boost, especially among investors.
The DLF New Town Heights project is the biggest by far. Location is good, right on Seaport-Airport road, the hub of recent developments in the area, and near the Civil Station – long-term, this may turn out to be a disadvantage as the road will get extremely congested once the construction in the area gets done. This Kakkanad flat project has gone through several pricing adjustments – the proposed launch price was as high as Rs 3500 per square feet but the market conditions forced them to have a soft launch with pricing at Rs 2350 in 2008. The pricing was adjusted up to Rs 2500 in mid-2009, to Rs 2800 in early 2010, to Rs 3200 at the start of 2011, and to Rs 3500 in September 2011. They also announced release of the Signature Tower with several exclusive features (Full Air-Conditioning, Exclusive Pool, Modular Kitchen, etc) priced at a whopping Rs 4800 psft. The first two towers (U and V) of Phase II of the project was announced in early December 2011 but the pricing is not yet set - the towers have 2BHK and 2BHK+S units with square footage at 1250 and 1356 respectively. Overall, we found this project to be of good value and to their credit they are a publicly listed company with a good reputation as a national builder.
Sahara Grace has the best location, away from the bustle of Civil Station Junction overlooking the Chitrapuzha River on Seaport-Airport road. Their Base Selling Price was the highest among the Kakkand flat projects we looked at, at Rs 3000psft - water body facing units are priced at Rs 3300psft. The few potential downsides with this project were:- Only 143 of the 728 units were sold and that implied they were finding it hard to get people to sign up,
- Despite having been the builder for high profile projects such as Aambi Valley, it was quite a task locating finished residential projects. Again, this implied their reputation as a residential builder is yet to be established,
- The overall finished look of their model home was well below par when compared with the Skyline Ivy League, and
- The project appears to be moving at a very slow pace and that is in general not a good sign.
03/2012 Updates:
Skyline IVYLeague: The sixth and final tower Cornell is launched at Skyline IVY League with a scheduled handing over date of 2013 December. The handing over dates of the first four towers (Yale, Sylvania, Harvard, and Columbia) have slipped to 2011 December. Pricing has increased by 20% to a Base Selling Price (BSP) rate of Rs 3100psft from Rs 2590 in mid-2010. There is very limited availability in the first four towers. For the last two (Princeton and Cornell), there is more availability subjected to phased launch schedule.
Sahara Grace: Sahara Grace delivery dates have slipped substantially. The projected delivery date for the first two towers (B1 and B2) is indicated to be end of 2012 as opposed to 2011 that was indicated when we talked to them in mid-2010. They also launched a new tower (A3). Pricing has not changed (Rs 3000psft and Rs 3300psft depending on whether it is water-body facing). The first two towers are nearing completion, but given the slippages, it is tough to feel confident about their new delivery dates. The project continues to move at a snails pace. Their recent marketing mailing indicate a price increase is forthcoming.
07/2012 Update:
DLF New Town Heights: The project has slipped and now expects handover to start by EOY-2013. The saving grace is that the construction agreement includes a provision for the builder to pay the client at a rate of Rs 5psft/month for every month of delay from the standard 30-month agreement - also, there is an optional supplementary agreement that allows for this rate to be double (Rs 10psft/month). Overall, the project is making very good progress - the towers A through Q are launched and work is proceeding at a rapid pace. The availability is limited as 95% of the inventory in the launched towers are sold - an alternative is to wait for the launch of towers R through V, although there is a risk for further price increase, if you go that route. The pricing has already increased from Rs 2350psft in mid-2008 to the current rate of Rs 4000psft (TBE November 1st 2012). The parking rate has increased from Rs 2.5L to Rs 3L and Club Charges from Rs 57000 to Rs 1.57L. DLF claims this project as the most appreciated on-going project in the area.
Related Posts:
- CREDAI Kochi Real Estate Property Expo - A Report.
- Kakkanad Flats (Condos) - Shopping Experience.
- Greater Kochi Villas and Plots Focus.
- Kakkanad Flats/Apartments Focus.
- Waterfront Flats/Apartments - Greater Kochi Focus.
3 comments:
excellent informative and well written article.
Right now DLF is priced 3750 as basic selling price. Preferrential location charges are extra.
very interesting article. Thanks
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