The current slump in demand is temporary

Published: March 3, 2009

R K Mittal, CMD, CHD Developers believes that the overall scenario in the real estate sector is moving towards favourable times and demands will soon start to pick up. CHD Developers, a public limited company listed on the Bombay Stock Exchange (BSE) since 1995, is developing several projects across the country.

Excerpts from a conversation with Praveen K Singh:

  • As a developer, what solutions you put forward to revive the industry against the downturn effect?

The real estate developers should focus on providing quality and affordable housing options suited to average Indian family whose disposable income is steadily on rise. Efforts must be made to provide them with quality housing options that suit their budget. The developers should now focus on offering more value to their customers and concentrate on profits through volumes instead of high-margins. This will ensure enough liquidity and rapid movement of their properties.

We believe that the current slump in demand is temporary. Downturns in markets are cyclic in nature and every downward phase is followed by an upward one. Our market understanding tells us that there are extremely promising times ahead, particularly in tier-II and tier-III cities in India. Once things stabilize at the global front and there is enough liquidity for Indian banks to bring the interest rates further down, the demand for quality residential and commercial properties will once again shoot up.

  • Do you think that the realty companies need to further bring down the prices to boost the sales of the unsold flats on which they are sitting?

If it’s feasible, then definitely they should. This will vary from developer to developer and project to project. Supporting the government’s initiatives to provide a boost to Indian real estate sector, many real estate developers have also taken the initiative by lowering the prices of their properties by up to 10-15 per cent and may also look at an additional 5-10 per cent cut if the government’s support is strengthened. As such, buyers will have no more reason to wait. The overall scenario is now very favourable for the real estate industry and we expect the demand to start picking up pace, helping all real estate developers to sell a lot more in the forthcoming couple of months than they did over the past two quarters.

Source: Indian Express

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