Though developers in the realty sector are facing an unprecedented pressure due the global economic slowdown and are being forced to think on the lines of reducing prices of their housing projects, Sahara Real Estate is trying to buck the trend and will instead hike the prices with effect from the next year.
Shedding light on the reason for doing so in an otherwise volatile market scenario, Sunderlal, sales head of Sahara’s Real Estate Business revealed that it was part of the company’s long-term business strategy to increase the prices of its projects with effect from next year.
“While the general situation is alarming and most developers are in a mess, we at Sahara Real Estate are slightly better off as because we do not face many of the problems that are being faced by other big players; such as we do not have to pay off any public funding or PE and FI debt. All our lands are mutated and paid for and construction on all our projects is on in full swing. As a result, people continue to buy our properties.
Had we not been selling, or had we too owed debts, we too would have been under the pressure to cut prices,” he said.
Admitting that most developers were walking the razor’s edge due to their pan-India expansions and land-buying spree during the last one and a half year, Sunderlal said the scene has totally changed today.
“It has become extremely difficult for many companies to survive these choppy times and the scene as we see it, may change for the worse, with many players being forced out of the market in another 2 years’ time.”
Stating that he cannot see any player cutting down on the prices of their running projects, he opined that the move would be suicidal. “Those developers who are in deep financial trouble may be forced to cut prices in order to boost demand for housing projects but cutting down prices will be suicidal. The more we reduce, the more confusion there would be regarding the change in the market scenario. People would hold on to buying and expect prices to go down further, forcing the developers to reduce more. That would be a never-ending cycle. And furthermore, how can we reduce prices when the prices of raw materials have not gone down? We will not be able to survive if we do that,” he added.