Citizens' Issues
Real estate developers jack up prices despite a pile-up of inventories
Despite a much improved market scenario, real estate inventories are piling up with builders. Undeterred, they are launching new projects. In the second quarter of this financial year (Q2 FY10) inventories have gone up by 20%. Last quarter (Q1 FY10) the inventories in six cities (Mumbai, NCR Delhi, Bengaluru, Pune, Chennai and Hyderabad) were a total of 2,82,999 units.
 
“From October onwards you will again see a drop in price of properties by 15%-20% as the developers have lot of inventories logged up. On top of that, they are increasing prices, encouraged by a more buoyant market,” said Pankaj Kapoor, founder and chief executive officer, Liases Foras, a property research firm.
 
In Mumbai as many as 68,000 units are unsold. In NCR Delhi it is 70,000 units, Bengaluru has 48,000 unsold units, Pune has 44,000 unsold units, Chennai has unsold units of 21,000 and Hyderabad has 31,999 unsold units.
 
Thanks to a slight recovery in the real estate sector, most of the builders increased prices by 10%-20% which has subdued sales. “In Pune, around 200 new projects have been further launched between June 2009–September 2009. We are foreseeing the same kind of situation across the six cities,” said Mr Kapoor.
 
During Dushera to Diwali most of the developers launch new projects. The inventories are increasing sharply and to reduce the inventories, the developers have to cut down on the prices and make their properties more affordable for the masses.
 
In Mumbai, properties beyond Borivali, were selling at Rs 2,000 per sq ft. The left-over properties are now priced at Rs 2,800 per sq ft. In central Mumbai properties sold at Rs 13,475 per sq ft, but the left-over properties are now priced at Rs 24,950 per sq ft. “Until developers do not bring down prices, properties are not going to sell,” said Mr Kapoor.
- Pallabika Ganguly [email protected]
 

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Real estate developers jack up prices despite a pile-up of inventories

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Consumer electronics sales up on festive sentiments
The festival season is bringing good fortune for consumer electronics, especially the white goods business. Visible recovery signs, like momentum in the stock markets, late recovery in monsoon and the second instalment under the Sixth Pay Commission to government employees are proving to be a catalyst for markets.
 
“We have witnessed 25%-30% growth on a same-store basis than last festive season. There are lot of combo offers that we are giving this season like, if you are shopping for Rs1,00,000, we are offering an LG LCD television free. For those shopping above Rs15,000, we are offering different free goodies or slab offers,” says Manoj Kumar, chief executive officer, e-zone, part of the Future group. 
 
"During the festive season, we are expecting a 30%-35% growth in sales," said Vishal Mevani, director, Kohinoor Sales. Last year, during the festive season, Kohinoor witnessed sales of about Rs20 crore, which it expects to go up to Rs25 crore on good response from consumers to its various promotional offers.
 
"With the Diwali season and the flow of funds from government employees, we expect our sales to go up by 8%-10%," said Nilesh Gupta, managing partner, Vijay Sales, a consumer electronics and durables retail chain in Mumbai. 
 
According to official estimates, the total arrears payable under the Sixth Pay Commission are estimated to cost Rs293.70 billion to the government kitty.
 
Videocon, the consumer electronics giant, has launched some new interesting combo products, which the company claims to be "world's first" LCD TV with build in DTH set top box (STB) and a Satellite DVD, which is a DVD player with in-built DTH STB. With both these products the company is offering 2-3 months free subscription to its newly launched DTH services and free installation of dish antenna.

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