Realtors optimistic despite recession

The global meltdown has spread gloom in the real estate sector, which had been on a roll in the last five years. However, major realtors expect the industry to bounce back within six months since the traditional home market in India is very strong. The country’s realty sector, which is growing at 35 per cent, is estimated to be worth $15 billion. Experts assert that the realty sector will continue to grow at 30 per cent annually over the next decade though it is on a low at present because of the worldwide recession.

The AP Builders Forum, which studied the current scenario, feels realtors would be facing a tough time for a while. But the problems would be solved once the government takes steps to save the industry. “We think the real estate market will have a wonderful future in the next few years though the sale of houses has been affected temporarily,” says Mr C. Sekhar Reddy, president of the AP Builders Forum. Real estate companies such as Aliens, Lanco, and Landmark Builders feel that the situation will improve within six months.

“The recession may have its impact temporarily but cannot disturb the market for a longer period,” says Mr Hari Challa, managing director of Aliens Group. “Buyers are still coming to invest in our projects including Aliens Space Station I and Aliens Space Station-II. It indicates that the traditional home market is strong in Hyderabad.” “Timely intervention by the Reserve Bank has given a big relief to the real estate sector,” says the Lanco Hills chief executive officer, Mr S. Pochendar. “With the reduction of Cash Reserve Ratio, banks will have more funds and will be keen on encouraging industry again. We hope the worst is over.”

However, Landmark Builders managing director, Mr. Sanjay Kumar, admits that many buyers are adopting a wait and watch policy hoping that rates will come down further. “The market will stabilise slowly and it will witness a fresh boom after the elections,” he says. “It is better to invest when flats and villas are available at affordable rates.” According to Mr Prem Kumar, general secretary of the Greater Hyderabad Builders Federation, the recession would not have any impact on the sale of flats meant for middle-income groups. “There is a heavy demand for functional flats though buyers are not interested in luxury flats,” he adds.