While there are visible signs of a recovery in the real
estate market, property price hikes by developers and any increase in
interest rates could halt this momentum
The
realty sector; which was the worst affected by the downturn last year,
seems to be exhibiting early signs of a real estate market recovery. Real
estate Price cuts on projects over the last six months and healthy pre-project
sales during the festive season seems to suggest that property projects demand,
which had all but disappeared in the third and fourth quarter of 2008-09, seems
to be trickling back. Real estate Developers are tweaking their real estate
business model by launching smaller apartment sizes and playing the volume game
to keep property prices low and
create property buyers interest. What was helped matters, believes Ramnath S, director;
Research, IDFC-SSKI, are factors such as job security and affordability, which
are gradually improving, and a lot of companies likely to revise salaries
upwards as against a freeze last year. The benign interest rate environment has
also helped. Ramnath believes that pay commission hikes will also increase
disposable income of government employees.
