If the sale of over 600,000 application forms for the 5,020 apartments on offer by the Delhi Development Authority is any indication, private developers in the national capital region are in for tougher times ahead, as investors are betting on their chances for higher returns from the cheaper DDA flats. On an average, a DDA flat is on offer at half the price of apartments being developed by private developers.
Indian exporters are not opening the bubbly yet despite a rapid depreciation of the rupee, which fell to a 17-month low of Rs 44.17 against the US dollar on Tuesday before rising to close at Rs 43.85.
The drive to cut costs is becoming critical as key input costs - steel, cement and labour - that account for 40 per cent of project costs have escalated 50 per cent over the past year.
For such bonanzas, prospective home buyers have a downturn to thank. Property sales have fallen 15 to 20 per cent countrywide over the last six months, owing to rising home loan rates. This has pinched the cash flows of developers, already reeling under higher borrowing costs and a range of anti-inflationary measures that restrict their flexibility to raise funds.
Money is the new God and spending it is the closest that one gets to nirvana. These five malls together accommodate close to 1,800 showrooms and smaller kiosks that sell almost everything a consumer could want. The number of visitors at Select City Walk averages around 2,000 on weekdays, going up to 6,000 on weekends.
A day after the Reserve Bank of India (RBI) raised the benchmark repo rate and cash reserve ratio (CRR), leading property developers said they are mulling hiking prices of apartments and focusing on the affordable housing segment to counter the impact of a high interest rate regime.
Affordable housing, the most neglected segment of the real estate sector, is now attracting large-scale investments from developers as well as private equity funds.
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