The slowing demand for residential property may lead to a dip of 10% to 15% in the overall prices of properties across the country. The prices have been stable till now because of the holding capacity of the developers in the market, bankers said at a global conference on banking jointly organised by FICCI-IBA.
At the sidelines of the summit, Sunil Rohokale, head, home loans & mortgage, ICICI Bank said that the property prices have been stable due to holding capacity of the developers. They have been able to put the sale of the property on hold as they have earned enough money in the last three years.
He said that there is a slow down in the demand of the residential properties largely due to the high property prices than the rising interest rates. “The prices of the property may dip by 10 to 15%. However, he said that it would be difficult to give a time frame for this fall,? he said.
Earlier, addressing a gathering at the conference, Rohokale said that the interest rate have gone up by four per cent, from 7.2% in November, 2004 to 11.5% now. This increase has impacted the affordability of the consumers by 20% to 22%.
He said that the hot money is chasing in several cities like Chandigarh, Jaipur and suburbs of Bangalore. The present prices in these places may not be sustainable for a long period.
He said that the frauds in the housing sector can be mitigated. Multiple credit bureaus are coming up which will be helpful in arresting these frauds. Another participant Pranay Vakil, chairman, Knight Frank India Private Ltd said that 220 malls may come up in next two years from the present 58 malls in the country . He said that legislative reforms and corporate participation will help the growth of the real estate growth in the country.