realtymantra

Residential property rates may fall 35%

April 11, 2009: Realty brokers in India expect residential property prices to settle down at a 25-35 per cent discount on the current listed prices over the next couple of months, according to a recent survey. About Time!!

The demand for homes remained muted in the otherwise busy season of January-March, the findings of the nationwide property brokers’ poll, conducted by financial services company Edelweiss, indicate. The only projects selling are those priced at least 25-30 per cent lower as against the ongoing market rates, while real estate companies reluctant to slash prices are struggling to clear inventory.

“Customers are coming back for deals. Prices have begun to consolidate at 30-35 per cent discount to the list prices,” said Ram Yadav, corporate strategy head, Orbit Corp’s.

Some aggressively priced new projects, including Lodha’s project in Thane, HDIL’s in Andheri and Nirman Lifestyle’s Mulund project, are doing well in Mumbai. “HDIL’s Rs 7,651/sq ft at Andheri is a good price as compared to Rs 6,000/sq ft at which the state housing development authority MHADA is selling its flats in a similar area,” said Santosh Naik, MD and CEO of Disha Direct, a real estate marketing company.

Property dealers, the report says, don’t see a recovery in the domestic realty market any time soon as buyer sentiment is expected to remain subdued due to the weak economic environment.

According to the survey, 76 per cent of the brokers expect prices to decline over the next three months and about 53 per cent of them see the trend continuing over the next one year.

City wise, Bangalore is the least pessimistic with 32 per cent of the brokers surveyed having a negative price outlook over the next one year, while Chennai is the most bearish with 73 per cent expecting a decline in realty value.

Sales during the January-March quarter are expected to be much lower (less than 50 per cent) than what they were in the corresponding quarter last fiscal.

India’s largest real estate companies DLF and Unitech are faced with unsold inventory and increasing interest costs. Things do not seem to be getting better for at least another year for either of these developers.

rajeshn07

Yes. you are right. DLF, Unitech etc are already in deep trouble reg cash flows. this is putting more pressure on the prices.

abk

BROKERS were the butt of the jokes here and now we see acceptance of their word here.
surely every dog has its day.