If the Telangana agitation continues for a long time, the investors and players in the real estate industry can forget about any hopes of a revival in the next three years. Although the price of land and housing units will not come down further, there will be no increase in prices in the near future.
The immediate adverse impact will be on the “just picked up” sales of housing units in the range of Rs 15-30 lakh. Mr Jaiveer Reddy of Ashoka Builders said while the market for high-end flats and housing units is yet to pick up, business in the below Rs 30 lakh category had started showing signs of improvement.
Sales in this category may now slow down with the revival of the Telangana sentiment as prospective buyers would prefer to wait and watch. Mr G. Anand Reddy, the executive director of real estate giant PBA Infrastructures Ltd., agrees that the rise of the ‘T’ factor has come at a time when the lower-end market was showing signs of improvement, holding out hope of a revival in the high-end market too.
However, Andhra Pradesh Builders’ Forum president, Mr Ch. Shekhar Reddy, said the market was already at its lowest and the Telangana unrest cannot cause it any more damage.
“Some builders are selling flats at even Rs 1,400 per sq feet, although with low quality components and less specifications. At the most, they will stop selling the units. But they cannot reduce the price because they can’t go below Rs 1,400 per sq ft which is almost a break-even point,” he said.
Ramky Real Estate Group chairman, Mr Ayodhya R. Reddy, said the unrest will hit hard those builders who are already paying huge interest on money they borrowed for high-end housing projects.
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