Northern realty goes down under

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Realty firms on hiring spree againDLF profit crumbles 77%Realty demand up 15% in Q2‘Property rates to fall 25% in 12-15 months’

: any bonanza scheme to lure the buyers. Though there has been a 10% fall in the demand but we will be launching five projects before January 26, 2009 as this is the right time to expand,” says DP Srivastava, Director, Omaxe.

But the company is ready to take corrective measures if the grim situation continues like slashing the prices by 5-10% in the future or by shifting focus to affordable housing from luxury housing projects. Another Omaxe official says, “We are constructing about 720 flats in Baddi. Though the bookings are on but the response is slow. The slump in the market has affected sales. Initially the company had plans to develop flats over 26 acres but due to falling demand, flats are being developed over 12 acres and 220 plots for commercial use over 14 acres have been put on sale.”

Seconding his view, SK Bajaj from Shakun Infrastructure Baddi expresses, “As the investors are pulling back their hands the demand from the companies has increased, shooting up the rentals in Baddi. We have rented out about 50-60 three-bedroom flats to Cadbury at a monthly rental of Rs 18,000 per month per flat. Even the two bedroom flats are being rented out for Rs 14,000 per month.” Where a two-bedroom flat can be rented out at Rs 5,000-7,000 in Chandigarh, its rent in Baddi is around Rs 10,000-Rs 13,000 and for three bedroom it varies between Rs 14,000-18,000.

Cautious development

A few companies have gone cautious about expanding further as they are concentrating on their ongoing projects. RK Mittal, Chairman and Managing Director, CHD Developers says, “Currently the buyers are in a wait and watch mode. The upheaval in the real estate industry was well anticipated in the light of global economic scenario, rising inflation and interest rates from Indian banks. We are concentrating on the development of our current projects at Vrindaban and Karnal so as to ensure timely deliveries to our customers. The present market scenario is not conducive to initiate new projects and any future projects will be announced only when we are confident of their viability and timely completion,” he says.