The year that has gone by belied the expectations of property buyers, mainly due to the reluctance of promoters to reduce rates significantly
The slump in the Indian property market as a result of the global economic meltdown was, in fact, a product of the year 2008.
Despite the revival measures implemented by the Union government and the Reserve Bank of India, such as reduction in interest rates and special treatment for loans up to Rs.30 lakh sanctioned to affordable homes, in real terms, the demand from buyers remained low throughout 2009.
At the same time, property development did take place, especially in the small segment.
The year saw Tata Housing, Godrej Properties and a few others going in for development of one-room apartments, especially on the outskirts of metros and in tier-2 and -3 cities.
Another trend was new marketing strategies such as offering modular kitchens and furniture to lure the low and middle income group.
We have seen plenty of ads projecting eco-friendly habitats, nil interest for the start-up period and longer/lower repayment schedules.
High prices
Prices remained high, mainly due to the reluctance of the promoters and developers to reduce the rates, maybe for reasons such as high cost of land paid earlier, cost of materials and labour and so on.
In Karnataka, one factor was the high level of ‘guidance value’ fixed by the State government about two years ago when property prices were at their peak.
Of course, there has been some talk in the State government corridors about revising the guidance value downwards in line with the market, but nothing has materialised so far. All said and done, 2009 was rather a ‘plateau’ for property segment growth.
Many authorities feel that the recession is almost over and the economy is looking up. Industrial indexes have gone up in a couple of months.
There is even a talk that it is time to withdraw the support measures provided by the government and the RBI. The recruitment activities reintroduced by some software companies also has given optimism of economic revival followed by sectoral growth. All these are likely to push up demand for housing in the first quarter of 2010.
News Published Under: The Hindu