Realtors see brighter days ahead

Realtors see brighter days ahead

The sector which was seeing a boom had witnessed sky-rocketing prices still fetching buyers and positive business environment. But after September 2008, with the onslaught of global recession, came the changing trends that saw depleting demand and price value.

The sector now seems to be passing through the tough times with some corrections, though full recovery is still distant.

“There has been a positive trend in the past few months of the year, as the corrections that were due in the industry have come by and we see the trend to continue,” Vaswani Group Managing Director Neville M Vaswani told Deccan Herald.

A recently conducted study by Edelweiss titled Bangalore real estate report reveals that Puravankara Builders, which used to sell more than 100 units in a month earlier, had sold only four to five units in the third quarter of 2008-09.

However, sales have increased to 20 units per month in the fourth quarter — but about 80 per cent lesser than the number of units it was selling earlier.  Similarly, Brigade group had sold 18 units per month in the third quarter of 2008-09 but the number jumped to 54 units in the fourth. Sobha Developers is selling about 40 units per month currently — up marginally for the previous corresponding quarters.

Encouraged by the upturn in demand, Vaswani said that the company will finish its projects in the pipeline and will launch four new products across the city. Out of which three will be residential projects and the other would be commercial.

New launches

Puravankara is also planning to launch a four million square feet mid income housing project, called affordable housing, in North Bangalore in 2010 through its 100 per cent subsidiary Provident Housing and Infrastructure.

General improvement in sentiment after the results of the general elections and low home loan interest rates are seen as the factors that have led to improved consumer sentiments.

The report also suggests that the newer projects expected in the city will remain stagnant for some more time, as the builders will concentrate on completing on-going projects and clear inventories first.

Further, the companies are expected to look at cost cutting measures to stay upbeat in difficult times — by increasing margins.

Builders are cutting down on advertisements and sales promotions and are constantly examining various other means.

For instance Sobha is focusing on reducing staff costs and has cut its staff strength by 30 per cent to 2,100 in March 2009. For the financial year 2009, it reduced its administration and other expenses by 22 per cent compared to 2008.

Puravankara on the other hand had cut its advertising and sales promotion expense by almost half in the second half of the financial year 2009 compared to the first two quarters in the same year.