Real estate down but not out
If you go to a property broker as a buyer, he’ll quote high. But haven’t prices fallen? Nah, he’ll say, only marginally. Go to him as
a seller and he’ll tell you it’s a depressed market and quote a ridiculously low price. So, which is true?
A bit of both, actually. Property prices are down but haven’t really crashed. Not yet and not at least in metros such as Delhi and Mumbai. But new properties on a city’s periphery are going relatively cheap — often by as much as 25-30% than the asking rate three months ago.
Developers are throwing in sops other than lower prices to get buyers interested. Some are even offering the undertaking of another rebate if prices fall further. They say the fish is finally beginning to take the bait – buyers have started coming in the past couple of weeks.
So, can prices fall any further? Perhaps, by another 5-10%, but there’s no crash coming. At least, that’s what real estate consultants say.
Anshuman Magazine, managing director of CB Richard Ellis, South Asia, says, ‘‘Actually, the property market could be bottoming out, particularly for new apartment
projects”. But how are developers able to cut prices? Partly by cutting the fat profit margins that the real estate industry had got accustomed in the last four years and partly by sleight of hand. Market trends in the last couple of weeks suggest there is demand if developers sell their apartments for 25%-30% less than the going rate in the area.