Sahara to defy realty slowdown

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.

4 Comments

  1. dave in NYC
    Posted December 5, 2008 at 10:29 pm | Permalink

    Wow, that is brave to raise prices in such a climate. Time will tell if it is the right thing to do, although I’d imagine they’ll drop them if units are not selling.

  2. Anil
    Posted December 6, 2008 at 1:00 pm | Permalink

    Reducing prices suicidal?? very funny statement in globalisation and capalists economy..where did you studied economics Mr/Ms Author. Who said, input costs have not come down…look at Steel , cement and even labor…these are stupid tactics builders are playing…they were very smart and intelleigent to apply demand supply principle and increase costs which of course was not in propotion to input costs. dear builders, its time to apply same priciple now…do you hear us? you kind of applying these policies only one way which doesn’t work in capitalism…you can’t get away or manipulate this. everyone knows your profit margines sometime back…which you are still living for such patience now..but buyers too learned a lot in this patience game..lets see who wins..ALL THE BEST!

  3. Vinita
    Posted December 12, 2008 at 12:58 am | Permalink

    Despite the crisis ravaging real estate markets, the move by Sahara is a sheer precedent for other real estate developers to emulate so as to strike a bottom to the depressing property valuations. The Govt initiative to reduce the interest rates on home loans to boost the demand from end users will only be fruitful if the developers will be able to contain the speculations of further devaluing of property prices.

  4. rajesh
    Posted March 25, 2009 at 12:15 am | Permalink

    real state sector reducing the price due to crisis but what do u think about the govt alrady drop the home loan rate then people are not able to buy a flat. they \\

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