According to developers based in Mumbai, currently, the realty market is going through a dip.
Developers across Maharashtra have decided to not launch any major residential project until the Lok Sabha polls come to an end. They have decided to wait until the next government is formed so as to have clarity over housing and environment policies.
According to developers based in Mumbai, currently, the realty market is going through a dip. "We get to hear about outcomes from varied sources. Someone says there will be a hung parliament while others tell us that the Narendra Modi-led NDA government will return to power. Others say that like 2004, the Congress party may bounce back and form the UPA III government. In 2004, the government got a major boost from the Southern states and they hope to repeat the same in the ongoing Lok Sabha polls. As part of their strategy, Congress president Rahul Gandhi is contesting from the Wayanad Lok Sabha seat in Kerala," a developer said on the condition of anonymity.
Manohar Shroff, vice president of the Maharashtra Chamber of Housing Industry (MCHI), Navi Mumbai, said that developers have decided to wait and watch only due to the ongoing Lok Sabha elections. He said that there is no satisfactory sale of properties, therefore, there is no point launching mega residential projects during this volatile period.
Sunil Mantri, ex-president of the Maharashtra Chamber of Housing Industry (MCHI) confirmed that developers are not taking the risk of launching big projects for now. "Developers wants to launch small projects to let people be able to afford the houses. The concept of luxury houses is fading. People are more interested in small and affordable residential units," Mantri added.
Another developer revealed that many politicians are developers in Maharashtra and particularly in Mumbai. "In the Assembly election, politicians need money to fund processes. Thus, a majority of funds for the real estate has been diverted towards political parties. As a result, the real estate sector sees a slow flow of funds. Funds will start flowing well once elections are over," a developer, who is also a politician, said on the condition of anonymity.
Pankaj Kapoor, MD at property research firm Liases Foras, said that buyers are currently not able to buy houses at high costs. "They are waiting for price corrections while on the other hand, developers are waiting for a price rise. In the current market, developers are not getting more than 20 per cent profit in any project and are dealing in 5 to 10 per cent profit margin only," Kapoor added.
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