RESIDENTIAL REALTY PRICES MOVING UP

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:10.0pt; mso-para-margin-left:0in; line-height:115%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-fareast-font-family:"Times New Roman"; mso-fareast-theme-font:minor-fareast; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;}   Residential real estate prices are going up. Inthe last three months, prices of affordable apartments have appreciated byaround 10% across the country.  "With improvement in thesentiment in the economy, transactions in the affordable range of residential real estate havegone up. This has made developers to increase prices by 5% to 10% in the lastthree months," said Anshuman Magazine, MD of real estate consultancy firmCB Richard Ellis, South Asia.  The developers had cut pricesby around 30% in first two quarters of calendar 2009 to revive the demand ofresidential units, which plummeted to a low due to the global financial crisis.Magazine said the price cut led to some recovery in demand. Enthused by the partialrecovery, he said, the developers , who had sold asubstantial portion of their projects at hugely discounted prices, decided toincrease them marginally in the next phase.  According to an IIFL report,in Mumbai, prices are up 25%-40% from the bottom in early 2009, while in NCR,the corresponding figure is 15-20%. ‘‘Constrained supply and a revival indemand drove up prices in Mumbai, and NCR," the report said.  In Mumbai, the prices ofapartment in Metropolis, being developed by HDIL appreciated by 38% since Marchto Rs 10,500 per sq. ft. Similarly, the project, Planet Godrej, has become 20%costlier to Rs 25,000 per sq ft in the last six months. In NCR also, manydevelopers like DLF, Unitech, Jaypee Greens, Mahagun and Amrapali among others,have increased prices by around 10% from the launch prices in March-June. Inthe premium segment also, there is revival in demand, said Vibhor Gupta, seniorofficial of Jaypee Greens . However, theprices have not witnessed any escalation in the premium segment. Similar trendhas been noticed in cities like Bangalore, Pune and Chennai.  "The current trend ofprice escalation cannot be sustained as it will affect the demand," saidAditi Vijayakar, ED of Cushman and Wakefield, adding, as the demand has revivedfollowing interest rate cuts by banks, many developers have announced projectsin the affordable range . This will increase thesupply and will put pressure on the price rise.  At the same time, anotherconsultant said the financial condition of the developers has not improved to alevel that they can hold a project for long. They need cash flow to service thedebt, which they have taken to buy lands. The source said the money from othersources like dilution of equity is still not easily available. This has forceddevelopers to depend on the sales proceeds to service debt  Courtesy:- TOI dt:- 09-10-09

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