Don’t bury those dreams of buying a house just yet. There are hopes of prices coming down with developers considering a two-point strategy to overcome the depressed sentiments in the realty sector. According to industry sources, developers are now planning to reduce prices by 10% to 20%. Further, they plan to put some of their assets on the block.

The sources said the modus operandi being chalked out by grade A and B developers is to put projects in smaller towns — which have not taken off yet — on the block and book cash to complete their on-going projects. Hence, in the coming months, the sector will see many projects changing hands and this will help the buyer in the long run.

Meanwhile, National Real Estate Development Council (Naredco) and Confederation of Real Estate Developers Associations of India (Credai) — which have more than 3,500 developers on their rolls across the country — have also requested all members to slash prices so that the sales of apartments could increase. The reason for this request is because there has been less sales of apartments in the festive season than the industry had expected.

The other reason is that most of the developers are facing a cash crunch and by reducing the prices they feel the end user will come back to the market.

Says Anuj Puri, chairman & country head of Jones Lang LaSalle Meghraj: “An increasing number of small- to mid-sized developers are buckling under the pressure of mounting liquidity crunch. Even larger residential developments have been hit and many are now revisiting their plans to address the situation. It is, in fact, clear that developers hoping to sail through the current slowdown must reinvent their business strategies from the ground.”

In many projects, the developers are already offering a 10-12 % discount on down payment. Many in the industry say the developers’ new strategy includes focus on mid-income housing and execution and completion of existing projects rather than buying speculative land for future projects, besides enhancement of self-liquidity through freebies and discounts to buyers. In fact, industry bodies are lobbying with the government and banks to catalyse debt funding to the sector at lower interest rates.
Says Rohtas Goel, president, Naredco & CMD, Omaxe Group: “The consumers who book an apartment in the present market will be intelligent buyers . They know prices have already bottomed out and there is no cushion for further reduction in property rate.”

Popularity: 13% [?]