Indian Real Estate-Changing Scenario

The propensity of property cancellation in the city has surpassed statistics of several other leading cities in the country.
With almost 15% to 20% slide in the real estate demand across the country, the scene in Pune too is no different and developers have already started feeling the pinch.
“The real estate market across India is witnessing a downturn and the situation is no different in Pune either, where there has been at least 15% to 20% slowdown, a figure equivalent to the all India statistics,” Mavani said.
Though a nationwide phenomenon, but several reasons have resulted in the Pune-specific slowdown. “In Pune, as compared to other cities, a large number of bookings that take place are from investors. That has slowed down and cancellations too increased from the investors’ side, thereby making it one of the cities with highest number of cancellations,” Mavani explained.
He said Pune has also surpassed Bangalore in terms of property cancellations. “It cannot be quantified, but a lot of cancellations took place not only in the investors but also material side,” he said. A one-third of the total bookings in Pune are investor bookings, said KMPG officials.
“Several Pune-based builders have however already started taking steps by not selling properties to investors,” said KMPG executive director Prafull Jain.
Other reasons accounting for the slump are however overestimation and perception. “Lots of announcements of new properties were made with the IT and ITES boom, but that has not resulted in the equal number of homes being built. Moreover, many people are playing it safe and waiting for the market to change before they invest,” added Mavani. The move would also see a 15-20% correction of prices across the board.
“If the situation improves within 18-24 months, it is good otherwise it could go worse. Unlike the earlier slowdown in the 90s, the banking system does not have the ability to bail out the industry,” the report said.
On a positive side, however, the Pune-specific survey has revealed that an estimated supply of 16 million square feet of commercial space would be available in the city over the next few years.

2 Comments

  1. harsha
    Posted August 14, 2008 at 12:48 am | Permalink

    hi manish,
    I want to buy my first home in pune. is it right time to buy or to wait for more months.
    Builders are still not negotiating prices.
    What do you think , how much will be the price cut in per sq. feet rates?

    harsha

  2. Posted August 19, 2008 at 1:13 am | Permalink

    Thanks to choppy economic conditions, the real estate market continues to slide and some top builders expect a substantial dip in their sales this year. Mr. Niranjan Hiranandani, Managing Director, Hiranadani Constructions said, “Due to a slump in the real estate market, our forward budget planning has come down by 15%. Hence, by this year end, we expect our overall sales to dip by about 20% to 25%.” Earlier this year, the company was expecting a rise in its budget by about 35%, but calculations have gone awry. However, he feels that the market dynamics are still strong and there are a number of opportunities available for the realty market to grow in the long term. Mr. Hemant Shah, Chairman, Akruti City believes that only after Diwali, the real estate market will start showing some signs of improvement.For more view- realtydigest.blogspot.com

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