Real Estate Witnessing “Notable Downward Trend”

May 18, 2007	(1 votes, average: 5 out of 5)  Loading ...
Print This Story   Email This Story Subscribe Newsletter

After growing by leaps and bounds, Indian real estate is witnessing a downfall. Coupled with soaring interest rates on home loans and unaffordable property prices, potential buyers and investors are putting themselves off the market.

Indian realty has gone into deep freeze with more than a 50% drop in actual property deals in the past two months, as watched by real estate developers and industry connoisseurs.

And, all this has forced the developers to bring a significant drop in rates to give a push to demand and woo more property buyers. The property prices in India has fallen by 5 to 10% across edge suburbs like Kharghar, in Navi Mumbai, Greater Noida in the National Capital Region and Bangalore’s Hosur Road.

As the real estate is sliding and property rates stagnate, it has sent shivers among developers who are finding it difficult to hold the price line. Cheaper land also allows them freedom in fixing more profit margins. However, they are now focusing to withstand prevailing real estate trends in metros. Indeed, they have succeeded in their efforts to an extent. In prime locations, exclusive buildings, the price spiral remains unharmed.

Major players in real estate like Parsvnath Developers and MGF have cut rates by 15-20% in Greater Noida. On the other end are small developers who found it hard to survive have cut the property rates by 8 to 10% to attract the attention of customers, says Vijay Wadhwa, chief promoter of the Mumbai based Wadhwa Group.

Property prices in Navi Mumbai have slipped by 20% but there have been no cuts on prime land such as the eight lane coastal promenade of Palm Beach Road and the road going towards the proposed new international airport.

Confusion over zoning norms and FAR (the floor area ratio or FSI) mentioned in the Delhi’s Master Plan and higher interest rates for home loans have emerged as prime factors depressing the property buyers.

News Published Under:   Real Estate Trends |

Comments