Real estate looks up as prices move south
The real estate industry is on the road to recovery, reports Naresh Kamath.mumbai Updated: Nov 13, 2009 01:05 IST
The real estate industry is on the road to recovery.
According to a report by Ernst and Young (E&Y) and the Federation of Indian Chambers of Commerce and Industry (FICCI), the revival has been fuelled by lower prices, cheaper home loans and launch of affordable homes.
“In the last few months, the residential real estate segment improved due to improved affordability,” said Ganesh Raj, Partner and National Leader, Real Estate Practise, E&Y. “The segment has now emerged as the most attractive proposition.”
In the last few months, there have been lower interest rates, decline of prices by approximately 15-20 per cent and also launch of small-sized flats to suit consumer demands.
Small-sized flats like studio apartments and one-bedroom-hall-kitchen flats were revived while frills like swimming pool and club facilities were left out.
Developers also agreed about the revival part of the report.
“The market has become stable and is improving,” said Niranjan Hiranandani, managing director, Hiranandani Constructions.
He said that the state government has to step in to offer relief to buyers by offering various concessions. “There are numerous taxes which we developers have to pass on to consumers which increase rates of flats,” he said.
However, the report says that commercial, retail and hospitality industry is still down. The reasons quoted are low demand along with reluctance of multinational firms to expand their business.