Realty business stares at slowdown
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The multi-crore realty business in Pune seems to be staring at a possible slowdown as many new projects are being shelved. The rate of project clearance by the building permission department of the PMC has dipped by 12 per cent thanks to a fall in demand and rise in inflation. In Pimpri-Chinchwad, tough measures against illegal constructions by the PCMC administration has forced the builders to plan their projects meticulously, leading to delay in submission and clearance.
Prakash Deshmukh, president of The Indian Institute of Architects, said the question of affordability is creeping into the minds of home buyers, forcing them to rethink their strategy. Realtors say inflation and government apathy towards the issue means that price rise is passed on to the end buyer. In Pune, this essentially means that affordable housing has become out of reach for the common man. Although projects which neared completion this year had many takers, the fact is that builders had to change their strategy to suit the sluggish market sentiments.
Shrikant Paranjape, vice-president, Credai Pune Metro, said, "People resisted from high investments in properties. Though there were sales during festive seasons still the expected amount of sales for the year could not be attained. High inflation and rupee depreciation also led to sluggish market."
Senior Credai members said the builders in many cases either took up part completion of projects or shelved extending projects to tide over the cost escalation. "In this way, some of the projects which were supposed to have three to four phases were divided into smaller parts and completed," said a Credai senior member.
Some realtors blamed the government policies for the downturn. D S Kulkarni, chairman and managing director, D S Kulkarni Developers Limited, said, "2013 was bad for realtors. It was not about getting customers or not selling the flats, it was all about various rules and regulations that the builders were burdened with. The rules and regulations had no clarity and were against the realty sector."