From ET Realty
JAIPUR: The economic activity in the country may have staged a slow recovery but that has not been enough for developers to raise the property prices, which have been stagnating at two-year low levels.
However, the industry is expecting that the demand scenario can turn around if, along with an acceleration in manufacturing activities and new projects commissioning, the 7th Pay Commission recommendations are also implemented in the state.
“Developers have not been able to raise property prices in the last two years in the absence of a strong demand. But that can start to change in the next six months if government spending increases, manufacturing sector picks up pace and the state government implements the Seventh Pay Commission recommendations,” said Hitesh Dhanuka, co-convener of the Real Estate Expo-2016, organized by Credai-Rajasthan from February 19-22.
The real estate market is still struggling to realign itself to the skewed demand-supply equilibrium that has created headwinds for price appreciation and scared away investors.
“Whatever demand exists now is coming from the end-users. The percentage of investors in the market has dropped dramatically,” said Dhanuka.
When asked about builders reducing prices to the tune of 15-20% to offload idle inventory, Dhanuka said there can be some reduction in prices in the sub-urban areas but not in the city. “The rates may not have increased in the city but they have certainly not gone down. If there is some dip, it could be outside the city limits,” added Dhanuka.
The softening of steel and cement prices have also come to the rescue of the developers for protecting their margins. “The rise in labour costs and other raw materials like bajri could have forced the industry to raise the prices. But a significant fall in prices of cement and steel has offset the pressure,” added Dhanuka, on the sidelines of an event to announce the Credai-Rajasthan’s annual expo which, this year, will have participation from more than 150 developers and showcase about 600 projects.