It is time for developers to take stock of rising property prices otherwise the city might witness a situation similar to 1995.
It is time for developers to take stock of rising property prices otherwise the city might witness a situation similar to 1995, when affordability and banks infusing more liquidity led to the real estate market crashing down.
“While increasing the supply of land is a major concern, developers will have to examine rising prices to protect speculation from creeping into the market and leading to housing becoming unaffordable.
While the realty market is currently driven by genuine end users compared to 1995, steps will have to be taken to ensure prices are sustainable in the long run,” said Ramesh Jogani, Chief Executive Officer & MD, Indiareit Fund Advisors .
Jogani was speaking at “Realty 2007”, the real estate conference organised by the Confederation of Indian Industry (CII) on whether the real estate market is witnessing a meltdown in the country.
Though Jogani’s caution note was acknowledged by property experts like Sunil Rohokale, General Manager (Mortgage and Real Estate) with ICICI bank who felt correction is imminent, developers preferred to adopt a ‘wait and watch’ policy.
“The property market as such, sees a slack during the monsoon season. While we have seen a massive drop in the number of inquires , we will have to wait till Diwali time to see whether sales are picking up,” said Sunil Mantri of Mantri Developers.
Dharmesh Jain, chairman & managing director of Nirmal Group of Companies said, “Until supply increases, the concept of reducing prices will remain just a mirage. Currently there are ten buyers chasing one flat, this problem will remain.”
Harshavardhan Neotia, director of Bengal Ambuja Housing Development said, “If housing has to be made affordable, the government needs to let developers be able to access land at cheaper prices. Though the economy is booming, high interest rates have made low and middle income group housing become unviable.”
Earlier, speaking in the inaugural session, Principal Housing Secretary SS Kshatriya said that the state’s housing policy is likely to be finalized by July-end.
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