Even though the real estate sector is yet to gain adequate momentum, based only on a mild pick up in sales, a few developers have hiked rates. Discounts, which had become commonplace and were substantial when sales were at their nadir, are now being withdrawn. Will these attempts by developers to create an illusion of high demand succeed, or will they have an adverse impact on the nascent recovery?

VARIED INCREASES

The quantum of price increase varies, depending on the city and location. In Mumbai, where basic demand for housing, especially in the more central locations, remains strong, raising prices has been easier. Hence, Mumbai-based developer Lodha Group has managed to hike rates by 10-15 per cent. “We have marginally increased prices every month in our projects since their launch. The market response is still good,” says Abhisheck Lodha, director of Lodha Developers. According to a Mumbai-based property agent, “Presently, prices range from Rs 2,500-3,000 per sq ft in places like Kamothe, Panvel, Kharghar, Khandeshwar and CDB Belapur. Apartment prices have climbed by Rs 300-500 per sq ft in these areas.”

On the other hand, in a location like Gurgaon, where there is surplus supply, especially in the luxury segment, raising prices has been difficult. Unitech, India’s second-largest developer, claims to have increased prices marginally, by about 2 per cent.

According to Abhishek Kiran Gupta, head-research, Jones Lang LaSalle Meghraj: “In end-user driven markets where demand exists, developers are bringing in little supply. In these markets, those developers who have managed to offload a sizeable portion of their projects are now testing the market to see if it will sustain upward price pressures, and whether further rises can be initiated in future.”

... contd.