In a move that may put pressure on other players to follow suit, DLF, India's largest property developer, announced a reduction of up to Rs 13 lakh (Rs 1.3 million) in the prices of flats at its new residential project in Chennai.
This is the third city, after Bangalore and Hyderabad, where residential projects with reduced price tags have been announced in the last few weeks. Gurgaon, Panchkula and Kochi may also see similar project launches from DLF in the coming days, an executive of the company said. The decision is in line with the company's recent announcement, which said it was strengthening its focus on the 'affordable housing' segment in select cities.
Both existing customers as well as new customers will benefit from the price cuts announced in Chennai on Tuesday.
"We have not waited for the government to provide further stimulus to announce a cut in prices. The prices are 20-30 per cent lower than the earlier announced rates. This was possible after we improved our efficiencies and made some changes in the project specifications," Rajeev Talwar, group executive director, DLF, said.
According to a DLF spokesperson, the price at the time of the soft-launch of the project in March 2008 was Rs 2,800 per sq ft for flats in the range of 1,200-2,000 sq ft. Once the project was announced, it went up to Rs 3,000 per sq ft. The amount has now been revised to Rs 2,500 per sq ft for the initial customers and Rs 2,550 per sq ft for the subsequent ones.
Overall, there are 3,493 houses, of which almost 1,500 are available under the early bird scheme.
"There would be a benefit of between Rs 3.5 lakh (Rs 3,50,000) and Rs 13 lakh (Rs 1.3 million) per unit from the reduction, depending on the size of the apartment," the spokesperson said.
In the case of Hyderabad and Bangalore, where new projects were announced recently, the company reduced the size of the flats and also the price. The reconfigured prices were Rs 1,850 per sq ft for flats in the range of 1,088 to 1,500 sq ft.
The DLF move is expected to compel other players also to revise their prices for existing and new projects.
DLF Vice-Chairman Rajiv Singh had said last month that the company will reconfigure its residential projects to reduce the prices 15-20 per cent.
