The appeal by Confederation of Real Estate Developers Association of India (CREDAI) to its members, to consider clearing their inventories by reducing property prices has not augured well with its members in Punjab, who are unwilling to reduce the prices.
CREDAI, reacting positively to Finance Minister P Chidambaram’s suggestion for reducing the price of housing stock to clear the pile up inventories, had appealed to its members to think over the decision.
However, CREDAI members in Punjab believe lowering of prices to push up the sales of inventories was not possible, since developers already are selling at prices deemed to be rock bottom.
Interestingly, as per developers, there are 25,000 flats under construction in the Chandigarh periphery, which includes Mohall, Panchkula, Zirakpur and Kharar. The members say that as of now only 5,000 flats are there which are ready to move in. Despite piling up of inventory of constructed and under-constructed flats, developers in Punjab seems reluctant of softening the prices.
Kulwant Singh, CREDAI President for the Punjab region, says prices already are low amidst downward trend seen in realty market now a days.
“Despite input prices going up on account of dearer input costs , builders have not revised the prices in tandem with inputs costs.”
Singh argues the prevailing market price around Chandigarh for residential sector remains Rs 3,000 per sq feet(psf), while ideally considering the rise in input costs prices should have escalated to Rs 3,500 psf, thus negating the chances of downward revision in residential prices as suggested by CREDAI.
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Earlier this month responding to Finance Minister P Chidambaram’s suggestion for reducing the price of housing stock, developers apex body CREDAI has asked its 8,000 plus members across the country to seriously consider the proposal to sell in maximum numbers housing units by reducing the prices to the extent possible.
CREDAI national president Lalit Kumar Jain said the developer community is willing consider the suggestions made by the Finance Minister to unlock the value of the unsold stock.
Members of CREDAI say with mining activities getting restricted following court orders it has impacted the construction activity , raising prices of sand and gravel.
Pawan Bansal member of Punjab chapter of CREDAI also believes residential prices offered by developers in Punjab are already down and there is no scope for further revising the prices downwards.