As the property prices are on the rise and new apartments at affordable price ranges are difficult to secure within the city, resale market for existing properties is becoming hot in Chennai.
What is driving their demand, apart from the gap in the rates of new and old properties, is their location and HDFC, which organised a two-day event in Chennai recently, only expects this demand to grow.
Speaking to
Enquiries were coming in even after the event ended. He said this was for the first time HDFC had sponsored such an event and it was able to ‘create a standard'.
He said apart from the difference in rates between new and old properties, what was creating demand for re-sale properties was their location. New properties might not be coming up at desired locations to meet the demand or high prices could be a barrier.
Explaining the purpose behind the HDFC initiative, he said the event was organised by HDFC with the ‘objective of assisting and counselling customers' who wanted to buy resale properties. The focus was on advising customers on the ‘intricacies of the legal and technical aspects of buying resale properties'. HDFC held the show on the basis of the feedback from customers who have regularly sought its opinion on these critical aspects.
This was the first in-house event of its kind at HDFC, Chennai. Three years ago it had conducted a re-sale show at an external venue where HDFC had invited leading property consultants to showcase re-sale properties. But this time it organised a ‘Resale Weekend' at its four city branches — Anna Salai, Adyar, Anna Nagar and Kodambakkam — to offer legal and technical guidance only for resale properties.
Growing trend
Asked whether there was any spike in demand for re-sale properties, Mr Mathew Joseph said there was an increase in demand year-on-year for resale properties. At present, approximately 10 per cent of the loans advanced by HDFC in Chennai was for purchase of re-sale properties.
He expected this trend to grow. One of the reasons for home buyers looking at this option was the pricing of such properties and a greater possibility of negotiating terms with the sellers. That the properties are ready-to-move-in homes was another attraction.
But a more important factor that drives the growth of re-sale property market was they are available at locations where the buyers want to live because of proximity to educational institutions, health care facilities, places of worship or music sabhas or as the buyers could live closer to their older parents.
He did not notice any particular preference for geographical areas among the buyers and the demand was for all prime locations in Chennai, with the choice being driven by need.
On factors on which HDFC would decide to clear a loan proposal, he said HDFC would approve loans for properties that complied with the rules of CMDA or the relevant applicable authority.
Building age
With regard to the age of the building, while there was no specific restriction in terms of the age, on a general basis it considered properties which are up to 20 years old for funding.
However, HDFC's in-house technical experts would inspect these properties to ensure they are in good condition from a technical point of view and are marketable.
Mr Joseph said HDFC would fund a maximum loan of 80 per cent of the cost of a re-sale property and for a maximum term of 20 years subject to the borrowers' individual creditworthiness.
He said HDFC itself may not have a separate portal to list re-sale properties for prospective customers to choose from as it has two subsidiaries — HDFC Red and HDFC Realty — that list online properties available for sale.