abhi

Real estate investors worried by corrections in property prices can afford to breathe easy. If a Federation of Indian Chambers of Commerce and Industry (Ficci) survey on property prices is to be believed, prices will rise by 10-15 per cent over the next 4-6 months across tier I, II and III cities. The survey adds that the correction of up to 10-15 percent that has taken place in the overheated segments of the market was inevitable.

The correction in real estate prices is likely to be short-lived and confined to some over-heated locations, where supply is more than demand. With strong economic growth constantly generating new buyers, the upward trend in prices will resume over the next four to six months.

Areas like Whitefield in Bangalore, and Mohali and Ludhiana in Punjab have in recent times seen a 15-20 per cent drop in property prices. The Gurgaon market has been stable for the past six months.

Demand has been flat in Gurgaon for the past six months. High home loan rates and stock market volatility have led to consumers postponing their buying decisions.

The Ficci survey was conducted to assess the status of the market and is based on feedback from a sample of 24 real estate consultancy firms, developers, construction companies, builders and financing institutions. SBI, Unitech, Ernst and Young, JM Morgan Stanley, GE Real Estate and Mayfair Constructions are some of the organisations that participated in the survey.

67 per cent of the respondents were of the opinion that foreign direct investment (FDI) will contribute to an increase in property prices. 90 per cent of the respondents felt that IPOs will help make the sector more organised. No wonder then that large developers like Parsvnath, Shobha Developers and Akruti Nirman came out with public offerings last year, while Omaxe and DLF are slated to come out with IPOs this year.