The next tipping point would come when job confidence is restored along with all other factors and forces
If a developer does not sell at a particular price he will automatically come down
The year 2009 will lift the gloom in the real estate market as the property market turns buyer friendly with the cuts in property rates and home loan rates
Developers for their part would benefit as they will focus on creating volumes at affordable price points.
Wait and watch until property prices correct further:“There is money in the market but people are waiting till January-February as they expect prices to correct further and more conducive policy announcements," say experts.
Gulam Zia, Director, National Advisory Services, Knight Frank expects the market will correct itself further by another 15 % and almost 30- 40 % from its peak. There will still be a wait and watch until all of that evens out, he says.
Smaller, value for money homes without compromising on the quality:Developers point out that it would be a good bargain for buyers as most players would bring down their prices. Boman Irani, Chairman and MD, Rustomjee Group, says there will be more of smaller, value for money homes without compromising on the quality. “For instance , we are developing Rustomjee Urbania in Thane, a walk-to-work township with residences, schools, hospitals and convenience shopping.”
Stable property rates and maximum 10% appreciation:2009 will also be the toughest year for developers as they will have to work on lower margins and not increase prices. If stock markets can fall from 20,000 to 10,000, developers too have to take a hit in their margins. It would be a phase of consolidation for developers and 2010 for most part will see prices remain stable and appreciate by maximum 10%, says Ram Yadav from Orbit Corporation.
Increase the incentives for home loans up to Rs 40 lakh:"The government must come out aggressively to increase the incentives for loans up to Rs 40 lakh which would make it more meaningful in places like Mumbai besides further reduction in interest rates." says Pravin Doshi, Chairman, Acme Group and President, Maharashtra Chamber of Housing Industry (MCHI).
Sales depends upon:The success of real estate projects or sales in 2009 would depend on: - how quickly developers align prices to the market,
- offer attractive financial packages,
- differentiate themselves in quality,
- demonstrate delivery or keep time lines.
Property buyers can demand transparency:1) in area calculations,
2) in provision of amenities within the time line
3) insist on escrow accounts for under construction projects - says Balaji Rao, MD, Starwood Capital
To read more, please, visit - Padma Ramakrishnan - The Economic Times
Related Stories:1) There’s no harm in creating a demand by lowering the property prices - Pujit Agarwal, M. D., Orbit Corporation
2) You can demand to reduce your property rate even after signing the agreement and paying loan installments!
3) Developers are likely to be forced to reduce prices further and offer higher discounts to clear existing inventory - BNP Paribas
4) Indian real estate is facing negative sentiment caused by the global economic meltdown - Kumar Gera
5) The real estate sector has to get real about the changed market environment, doing itself, consumers and the economy a favor
6) Affordable houses to rule the roost - Dileep Athavale