Coimbatore, which is well known in the fields of education, healthcare, and manufacturing sector, saw tremendous growth in the property sector five or six years ago.
But, property development in the residential segment has come down now, says an official of the Coimbatore Local Planning Authority.
The official says that between 2009 and 2011, there were nearly 100 residential projects that were submitted for approval a year. It started coming down gradually and two years ago it came down to 40 projects a year. This year, it is just one or two projects a month, he says.
As a result as a decrease in sale, the time taken to complete the projects has gone up. Since the demand for residential units has reduced, the number of developments in the commercial space segment has also declined.
Vadavalli, Mettupalayam Road and Saravanampatti are some of the locations where the developments are happening.
A leading property consultant points out that while the number of proposed projects in Coimbatore this year was about 100, only about 10 per cent is coming up. Sluggish demand, the cost of approval and the delay in getting the approval are some of the reasons for the fall in the number of new projects. Further, everyone expects prices to fall further. Residential units in the price range of Rs. 80 lakh to Rs. 1 crore each and those priced below Rs. 30 lakh are in demand. While Saibaba Colony and RS Puram are the main locations in the city that are seeing development of high-end projects (of more than Rs. 7000 a sq.ft), those in the less than Rs. 30 lakh segment are coming up in the fringe areas of the city, and these are mostly developed by the local builders.
According to Rajesh Lund, president of the Confederation of Real Estate Developers’ Associations of India – Coimbatore certainly has the potential for growth in the property sector. Enquiries are good but conversion is taking time. With uncertainties in businesses, buyers are cautious. While there were several projects with 50 to 100 residential units , now promoters are looking at smaller projects at multiple locations.
The consultant and property developers here say that indications of growth in the economy will revive the sector. Reduction of interest rates will also bring about positive sentiment among the buyers, they say.
