There is finally good news for the realty market. After months of being stagnant, the real estate market across the country is showing some signs of revival. Demand in the residential segment is picking up and is growing by 10 to 20 per cent in the current financial year as compared to the last.
Thanks to depreciating property prices combined with the recent cuts in home loan interest rates along with a stable government at the Centre and their economic policies in place, a much-needed impetus has been given to the real estate sector. Going by industry sources, sales have picked up in almost all metro cities including Delhi-NCR, Mum-bai, Bengaluru, Chennai and Hyderabad. The last two months have seen the market suddenly turn positive with investors and especially end-users flocking in with their demands. Informs Manu Garg of Landcraft Developers, “There is a definite sign of revival in the realty arena. We have already seen some movement in the real estate market over the last two to three months. The good thing is that a high percentage of end-users are going in to buy, which is a healthy pre-indication of a mature and transparent market. Since speculative activities have been wiped out almost completely, things will change for the better with the government’s favourable economic policies.”
Adds R.R. Nair, director and CEO, LIC housing finance, “There has been a 40 per cent increase in the number of applications for home loans in the last two months. Since the market is picking up, we aim to sanction about Rs 12,000-13,000 crore this financial year.”
Not only is the property market coming out of the shadows, but the icing on the cake has been Union finance minister Pranab Mukherjee's latest initiative of exhorting public sector banks to further cut interest rates on home, retail loans and industrial lending to give the economy a boost. Says Rohtas Goel, CMD, Omaxe Ltd, “The move by the FM is a welcome step and is the need of the hour. I am hopeful that this will extend the affordability of loans to the masses. We expect the move to help in reviving the real estate sector — bringing relief to both the end-user and the developer. As the real estate sector has a multiplier affect for many associated industries and employment at large, the initiative will act as a boon to the sector and the country’s economy in turn.”
Avers Bhim Yadav, CEO of Falcon Realty Services, “Sentiment will improve significantly giving confidence to the industry, investors, buyers and the public at large. Further reduction in interest rates by public sector banks in order to boost credit demand will now bring down EMIs and this will further help buyers to go for affordable housing.”
There is no doubt that the dip in property prices has opened up avenues for the common man. Says Sunil Pandey, a realty expert from Delhi, “Those who always wanted to buy a home but did not dare venture into the volatile realty market are now buying a property of their choice.” And at rates that could well suit their pockets. On the other hand the developer and builder community is fast gauging the type of demand that exists and from the trends it seems clear that affordable housing will be the flavour of the months to come.
Sums up Sunil Jindal of the SVP Group, “There are many things that developers have to learn from the past year and implement those results in the coming year. A fall in sales does not mean that demand does not exist. It only means that somewhere down the line developers went gone wrong in tapping the right demand and supply according to it. Price cuts are one of the tools that developers used in 2008 and these will be used in 2009 as well. When we say affordable housing we have to define a price band. According to me the right price band would be Rs 25 lakh to Rs 35 lakh. Those developers who target this range will come out in winning colours. But to say that only price cuts will revive the industry would be asking for too much.”
All in all the current situation at ground zero seems to be favouring consumers and this period can be used by people who have wanted to buy property but just could not afford to, given the set of circumstances earlier.
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