Date:23/05/2009 URL: http://www.thehindu.com/thehindu/pp/2009/05/23/stories/2009052350240500.htm

Back Property Plus Bangalore Chennai Hyderabad Kochi Malabar Thiruvananthapuram

Light at the end of the tunnel

Real estate developers are optimistic of the industry looking up now with a stable government in place, writes T. Lalith Singh

Buoyancy returns: The glimmer of hope that things will fall into place in a post-poll scenario keeps the economy going.

Real estate will recover after the elections. And that happened to be the catchphrase for any discussion on property matters for the last couple of months. Developers buttonholed those who lent a ear on how projects were kept in abeyance. Most buyers did not mince words to state that buying options were on hold till the heat and dust settles down.

The government is in place and elections have delivered the verdict on Telangana that had been needling the real estate investors and developers for quite some time now. Whenever the proponents of separate Statehood showed their electoral strength, the developers with big money and big projects turned nervous.

This was proved even in the local body elections with the real estate going a bit cold when results went in favour of the T-factor.

Now that the T-factor hardly clicked, there is a sense of reprieve in the construction industry. As one of them pointed out, “at least for next five years the issue might not come to haunt”. The glimmer of hope that all will fall in place for the real estate post polls and the future seems brighter.

Buyers’ market

The industry feels that prices ‘went for a correction’ as they prefer to call. There will be no further downward cut.

“As of now, it is buyers’ market and the right time to pick up property. Once the activity picks up, there will be incremental growth in property prices,” says one.

The correction has seen the apartment prices going down by 15 to 30 per cent in most places, while sales have dwindled drastically in some other places.

Now, the industry is looking up towards the Union government for steps leading to a cut in home loan interest rates to infuse a fresh lease of life for the real estate.

At the same time, certain representations seeking rationalisation and slashing of developmental and other charges have been pending with the State government and some concessions to this effect are being anticipated.

As builders concede, the T-factor did exert certain psychological pressure on investors, there is a sense of relief in the industry. The boom-time is not expected to return, but the hope is that industry will recover and stabilise very soon.