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Home prices about to fall in Jan-March
Potential home buyers who have been deferring their purchase decisions, may have to wait till April-May to get a good deal. The ripples of the ongoing financial crunch, coupled with mounting pressure from various other circles, will peak between January and March. That’s when many developers will be forced to sell the unsold stock at a much cheap price, feel industry experts.
“The signals are very much visible. Developers are already offering lots of freebies. I feel, they will hold on to prices till the end of the festive season. If sales are not happening in the current quarter, the Jan-March quarter will see a price crash in some pockets, and in the first quarter of the next fiscal, developers will be forced to sell homes at a much lower rate as their loan repaying capacity will be under challenge,” said Anuj Puri, chairman & country head of Jones Lang Lasalle Meghraj.
He added that in the current market scenario, if developers want to bring some cash flow into their company, that will happen only by selling their residential and commercial properties. “All other routes are drying up,” he said. India’s property market has been among the hardest hit by the global financial turmoil as high interest rates and gloomy economic prospects have driven out buyers and squeezed funds for real estate developers.
Through this year, property prices have already declined more than 10-20%, though in cities like Mumbai and Delhi, prices are still too high for a middle class consumer. Developers like Orbit Corporation has already cut prices by 20% from Rs 26,000 to Rs 21,000 at Parel in Mumbai. Broking firm Edelweiss Securities in its recent report on real estate said property prices are likely to decline by 10% in the current calendar and another 15% by the end of the current financial year.
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