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Wednesday, March 26, 2008

Property prices at Hingewadi, Wakad and Chakan in Pune are still seeing appreciation - observes Sanjay Dutt, Joint MD of Cushman & Wakefield

Excerpts from CNBC-TV18's exclusive interview:

Q: We have been getting all sorts of reports, ICICI Bank saying unit sales have come down, couple of developers said that prices are relatively holding at this point in time - what is your assessment of value in this industry as a whole right now and how has it changed over the last three months?

Dutt: It is a given that the prices have actually slowed down, the markets are stagnating. But if we were to elaborate on the buyer segment, if we were to distinguish between end users and investors, I may agree with Rajiv that the overall slowdown is 20-25%. But when it comes to investors which are a speculative component of the markets, the fall has been significant. We assume it must be over 40-50% and that is where the impact is being felt by the developers, overall.

Over the last three months it's the erosion of confidence which has led to the psyche of the developers and they are now being more cautious in approaching new developments.

Q: Give us an idea of what are the zones - either geographically it is National capital region (NCR), Tier II cities where you are seeing a substantial amount of downtick, is there a Bangalore which is unwinding more rapidly than Chennai? Is it possible to give assessment in that aspect?

Dutt: India presents a combination of unique markets; if you were to divide between Tier I and Tier II, Tier III cities, then clearly Tier I cities have maximum economic activity and the demand side has not really gone down, except for the investors who have gone down.
What we have discovered and we came out with the assessment some time back that there are some emerging corridors in well-established cities and there are some emerging cities which are being viewed as future potential of economic activity and that is where the corporates investors and developers have parked their capital. We expect those are the pockets where the appreciation is still being registered. A good example would be Hingewadi, Wakad and Chakan in Pune.
Overall I feel the prices in the market where they have peaked customers have taken a cautious approach and are stepping back a bit and are not committing as they were in the past and there is a wait and watch overall situation.
Moneycontrol India :: News :: Truth behind realty: Where are prices headed? : real estates ,Rajeev Piramal,Peninsula Land

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