Slowly the real estate market is coming up as banks have reduced lending rates and especially in home loan segment most of the banks are offering 8% interest for the first year therefore some of the big developers have started increasing prices. But on Tuesday leading bankers have warned the real estate developers against raising residential prices as any such move at this point can bring halt in the recovery market.
Mr Deepak Parekh, Chairman, HDFC, stated, “Certain top-rung developers have already started increasing prices, especially in mid-income projects, following the recent pick up in sales. Besides, with liquidity no longer a constraint, certain developers are seeking once again to increase their margins”.He stated that just now the real estate market has begun correcting itself and it will be “extremely unfortunate if the developers were to increase the home prices at this juncture.”
While speaking at Habitat Business Forum event organized by FICCI, Mr Parekh, expressed his uncertainty on whether existing developers might stay committed to affordable housing segment.
Mr S. Sridhar, Chairman and Managing Director, Central Bank of India, expressed the similar views. He said that it will be “short-sighted” in case the players think of raising prices thinking that the demand is coming back into the market.
According to Mr Sridh, “It is difficult to generalize but as a whole there is some more scope for downward adjustment in prices, or in certain places it should plateau. That will stimulate the demand. If the real estate players revise the prices upwards, it will stall the recovery process”.
He pointed out however, the demand for housing loans has picked up among the banks.
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