Sales at Parsvnath Developers’ in the festival season of Diwali are down to half from a year ago, but the real estate developer does not plan price cuts to boost sales, its chairman said.
High interest rates on home loans and central bank rules forcing banks to assign a higher risk weight to real estate loans have dented property demand in India.
“There is a substantial fall, 40-50%” in Diwali sales, Pradeep Jain said on the sidelines of an industry conference.
“Liquidity is a large concern. Banks have frozen everything. The indirect message to financial institutions is not to lend.”
Analysts say property prices are still high and need to correct some more before demand picks up. But Parsvnath has no such plans, Jain said, citing rising input costs.
“We’re not going to cut prices. There is no softening of prices, the end-user demand is still there,” he said, but declined to comment on the firm’s expected sales in the fiscal year to March 2009.
Parsvnath would focus on reducing costs by reducing salaries and firing “non-performing staff,” and would speed up projects to improve cash flows, Jain said.
“We are not abandoning any project and not considering to do so,” he said. The cost cutting measures would come in within a month, Jain said.
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3 Comments
Having worked in the house building industry for many years, house prices were always cut as a reaction to declining demand. Who is going to pay full market price in a buyers market? Buyers would be insane to. Reducing salaries will only affect staff morale – and will it really save that much in the end?
Considering the current global economic slowdown and its impact on the Indian economy, realtors are coming up with novel marketing strategies to woo reluctant flat buyers. Realty players such as Mantri Synergy, Jains Sunderbans, ETA Rosedale and Hirco Palace Gardens have come out with new schemes to attract buyers. To lift up the ’sagging morale’ of prospective buyers, property developers have now come forward to pay pre-EMI (equated monthly installment) interest on part-money disbursed on the housing loan taken by a flat buyer. In the changed economic context, the prospective flat buyers have turned cautious and are deferring their buying decisions, anticipating a drop in real estate prices. This has put the developers in a fix. In order to retain the buyer, especially during this period, the developers are now opting to dish out freebees such as payment of pre-EMI.For more view- realtydigest.blogspot.com
Thanks for giving information about festival sales down.