Kushal Pal Singh, chairman of DLF, India’s largest realtor by market capitalisation, said as input costs go down DLF may see a decline in its project’s prices.
MUMBAI: Realtors are not happy with finance minister P Chidambaram’s price-cut fiat.
Kushal Pal Singh, chairman of DLF, India’s largest realtor by market capitalisation, said as input costs go down DLF may see a decline in its project’s prices.
Input materials like steel and cement prices have started falling. Steel prices in India have fallen by 40% and also due to stagnation in the cement market cement prices are too set to fall. Though there are others who are voicing against the finance minister’s wishes.
A spokesperson for Parsvnath Developers, the New Delhi-based player, said, “How can we abruptly reduce prices? When the government is not giving us industry status, which we are seeking for last two years, it’s not cutting down the sanction fees and taxes how can they expect us to cut prices for the buyers?” he asked.
“For buyers who have already put money in out projects we have not charged them any escalation cost which we saw last year due to input costs increasing. This is not practical to urge us for reducing prices,” he said.
Developers also feel that steps should be taken by both sides before price cuts happen.
They said even though the Reserve Bank of India has asked banks to lend to developers, banks are not keen.
Rohtas Goel, chairman and managing director Omaxe Ltd and also vice-president of National Real Estate Development Council (Naredco), said, “Property prices have already seen a correction of around 25-30%. But intelligent buyers are buying or booking apartments now because they know that prices have bottomed out. A majority of buyers who continue to be in wait & watch mode because of rumours and low sentiment, may miss the bus. Margins are already negligible for us.”
Goel requested the government to intervene and reschedule loans with a moratorium of one to two years.
A senior official of Bangalore-based Puravankara Projects toed the same line: “There is no question of lowering prices. In the north and west, prices have escalated steeply but in south prices have been stable. Our average price is Rs 3,000 per sq ft. How low can we offer now? We also need to look at our profits and our investors’ returns.”
The manager of a real estate fund, who did not wish to be named, had another viewpoint: “Realtors basically have formed a cartel and are begging the government for a bailout package. This year being an election year everything would be pushed under the carpet. This has become a completely one-sided game. We just hope that private sector banks do not disbursing loans to developers”
pooja_s@dnaindia.net
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