Developers slashes property prices
Developers to slash property prices by up to 15 per cent
NEW DELHI: It seems that the realty froth is finally settling down. After holding property prices for a long time, developers across the country agreed on Friday to cut prices by up to another 15 per cent.
Property prices across the country have seen a correction by 20 to 40 per cent, Rohtash Goel, chairman Omaxe Developers and president of the National Real Estate Development Council (NAREDCO) told reporters here.
"We are asking our members to reduce rates. The reduction will be up to 5 per cent for existing projects, 10 per cent on new projects and 15 per cent for the affordable housing section," Goel told reporters.
"However, there will be further discount for the customers who are paying on time," Goel said. "Developers do not have enough cushions for further price reduction as the cost of lending has gone up considerably. Also the price of cement and steel has gone up," he added.
Most of the big developers like DLF and Emaar MGF Land, the Indian unit of the Middle East's largest real estate developer, are also cutting prices to revive demand.
"We are in favour of reducing prices. Because of the demand and supply situation, prices are automatically going down," said DLF chairman K.P. Singh. "Demand is much less than supply, which is driving prices down."
As per a forecast by global investment banking and securities firm Goldman Sachs, prices of some property in India will drop 30 per cent in the coming days.
Even the prices of premium products, which cost over Rs.3,000 per square feet, will be lowered by at least 10 per cent.
Interestingly, the rate cut announcement came just two days after the industry had said Finance Minister P. Chidambaram's plea for lowering realty rates was "unrealistic".
The finance minister Tuesday asked developers to cut the prices to tackle the slowdown. Even Credai - the Confederation of Real Estate Developers Associations of India - Wednesday urged developers to slash prices given the general slowdown in the economy.
Source: ET-21 Nov, 2008
NEW DELHI: It seems that the realty froth is finally settling down. After holding property prices for a long time, developers across the country agreed on Friday to cut prices by up to another 15 per cent.
Property prices across the country have seen a correction by 20 to 40 per cent, Rohtash Goel, chairman Omaxe Developers and president of the National Real Estate Development Council (NAREDCO) told reporters here.
"We are asking our members to reduce rates. The reduction will be up to 5 per cent for existing projects, 10 per cent on new projects and 15 per cent for the affordable housing section," Goel told reporters.
"However, there will be further discount for the customers who are paying on time," Goel said. "Developers do not have enough cushions for further price reduction as the cost of lending has gone up considerably. Also the price of cement and steel has gone up," he added.
Most of the big developers like DLF and Emaar MGF Land, the Indian unit of the Middle East's largest real estate developer, are also cutting prices to revive demand.
"We are in favour of reducing prices. Because of the demand and supply situation, prices are automatically going down," said DLF chairman K.P. Singh. "Demand is much less than supply, which is driving prices down."
As per a forecast by global investment banking and securities firm Goldman Sachs, prices of some property in India will drop 30 per cent in the coming days.
Even the prices of premium products, which cost over Rs.3,000 per square feet, will be lowered by at least 10 per cent.
Interestingly, the rate cut announcement came just two days after the industry had said Finance Minister P. Chidambaram's plea for lowering realty rates was "unrealistic".
The finance minister Tuesday asked developers to cut the prices to tackle the slowdown. Even Credai - the Confederation of Real Estate Developers Associations of India - Wednesday urged developers to slash prices given the general slowdown in the economy.
Source: ET-21 Nov, 2008