Realty firms not ready to cut prices, opt to wait and watch

The Financial Express

Realty firms not ready to cut prices, opt to wait and watch
The Financial Express
Preeti Parashar
Posted: 2008-11-26 23:02:25+05:30 IST
Updated: Nov 26, 2008 at 2302 hrs IST
Even though the realty sector faces the heat of the global economic slowdown, builders of North are still not ready to reduce the prices of housing projects. These exorbitantly priced apartments are unable to attract buyers as the investors adopt a wait and watch approach.
Expressing his views on the current scenario, P K Jain, advisor, Parsvnath Developers told FE, “Due to the downward trend in demand, the buyers have postponed their deals for 5-6 months and are waiting for the prices to come down. We are approaching the buyers and dealers through campaigns to increase the sales. We cannot reduce the prices of our apartments as the input costs are still high.”
Prideasia- the luxury township project of Parsvnath, coming up at the Rajiv Gandhi Chandigarh Technology Park is also getting affected due to the slowdown as only 160 units out of the 1,314 proposed have been sold so far. And only six out of 34 villas have been sold out. Parsvnath has priced its villas at Rs 6 crore and penthouses at Rs 4 crore besides one to five-bedroom apartments ranging between Rs 52 lakh to Rs 3.8 crore. The buyers are finding it hard to afford these highly priced apartments and villas.
Another luxury housing project, Uppal’s Marble Arch, coming up in Chandigarh offers apartments ranging between Rs 1.5 crore to Rs 2 crore. A senior official shared, “We have registered 20% decline in demand of our apartments but 108 flats out of 168 have been sold. Now only the actual buyers are coming forward to crack the deals and we don’t intend to reduce the prices in the future.”
Though buyers are missing from the market but the recession has not deterred the expansion plans of Omaxe Constructions about its projects in Ludhiana, Derabassi and Baddi. “We are firm about our plans. Neither are we going to reduce the prices of our property nor launch any bonanza scheme to lure the buyers. Though there has been a 10% fall in the demand but we’ll be launching 5 projects before January 26, 2009 as this is the right time to expand,” said D P Srivastava, director, Omaxe. But the property consultants are of the view that the builders have to be more innovative to address the needs of the buyers. R P Malhotra from Dee Ess Estates, Zirakpur said that due to hike in prices by these developers, their apartments become unaffordable for common people