gelya promoter: Realty in the grip of slowdown

Friday, July 27, 2012

Realty in the grip of slowdown - Real Estate India

??|?? July 26, 2012 ?? 02:39pm ??|Contributed by MANOJa

DON?T THANK your service provider alone if your mobile phone isn?t flooded with SMSes announcing new residential projects launches in the NCR these days.

With a piled up inventory from the past and long delays in delivering projects, the real estate sector is going slow on new launches this year. However, that ? sadly for the consumers ? has not meant a drop in the property prices as the rates have shown appreciation by almost 40-45 percent across Delhi and NCR in the last one year.

As per the Confederation of Real Estate Developers Authority of India (CREDAI), the apex body for private real estate developers, the number of building plans sanctioned over the past 10-15 months has drastically come down. Delay of realty projects, it says, is to be blamed on multi clearances and approvals numbering over 40 by various departments of the government.

?There are hardly any new launches that have taken place in the last 10 months. And, in the near future also, the scenario does not seem very favourable. Right now, it is only in states like Bihar, Gujarat and Andhra Pradesh, where real estate development is taking place in full swing. The government policies in these states are real estate developer friendly,? said Lalit Jain, President, credai.

Direct conflicts with farmers in the NCR, like the one witnessed in Noida Extension, have also pushed the builders on the backfoot further resulting in cost escalation of existing properties.

?In the past few months, Noida has not seen any major launch of realty project. However, residential properties are showing good price appreciation. Even the projects which have been halted in Noida Extension are showing price appreciation by almost 40 percent in the last one year. Good demand is seen especially in the existing projects at Noida Expressway,? said Syed Mohammad Amjad, Assistant Manager, Sales, Investors Clinic.

?Realty developers are interested to invest in Noida but now, as per the new guidelines, they are supposed to take land from farmers and not government authorities. Earlier, builders had the option to take land on lease or pay through installments, so there used to be good liquidity available in hand but things have changed now,? he added.

The scenario isn?t much different in Gurgaon.

?The re-sale value of Gurgoan property is not as good as Noida. There are few project launches taking place,? he pointed.

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