Realistic prices boost flat bookings, show revival hopes

Early signs of deal-making in apartments during the first quarter of 2009 show a possible revival of demand in the real estate sector, say some analysts.

A study conducted by real estate research firm PropEquity in Mumbai, Bangalore, Chennai, Hyderabad and Gurgaon says absorption has been high among the residential new launches in the first quarter of 2009 in Mumbai, Chennai and Gurgaon, where developers had offered discounts and reduced flat sizes to lure buyers.

But absorption is less in Bangalore and Hyderabad where developers launched few projects on account of oversupply. “Mumbai has seen a rise in the absorption share of new launches. This encouraging trend is indicative that the markets are poised for a recovery if proactive measures are adopted by the real estate community,” said Samir Jasuja, CEO, PropEquity.

In mid-April, DLF opened bookings for its Moti Nagar project in Delhi at Rs 4,500 to Rs 5,500 per square foot against the earlier market price of around Rs 7,000. The 1,400 bookings were sold out in 24 hours, a DLF spokesperson said.
In Mumbai, real estate developer HDIL has received bookings for over 800 flats at its newly launched projects in Kurla and Versova where it had offered substantial discounts.

House buyers, though in small numbers, have started returning to the market after developers slashed property prices between 25 to 40 per cent for new bookings, say industry watchers. But a majority of them are said to be still waiting for a further correction in prices. “How much of these (reported new bookings) are actual sales? There is certainly some momentum in the market, but unless these bookings turn into housing loans, nobody knows whether those who have booked are actual end users,” said Pankaj Kapoor, CEO, Liase Foras, a real estate research firm. “The market is heading for revival much before we expected. Every developer who has offered discounts in new projects has reported good sales,” said Niranjan Hiranandani, managing director, Hiranandani Constructions.