Even freebies like Mercedes, BMW and gold medallions are failing to lure home buyers this season, resulting in a 50 % dip in purchases in both premium and mid segments, with experts predicting distress sales in six months.
The high cost of home loans, land acquisitions at high prices, a dip in demand from non-resident Indians and the general liquidity crunch are also compounding the woes of realty majors, the experts added.
“It is not that demand has declined,” said Santhosh Kumar, deputy chief executive officer of Jones Lang LaSalle Meghraj, a global real estate consultant and brokerage firm.
“There is a lot of demand in the middle segment but the prices quoted by developers are very high,” Kumar told IANS.
According to Anil Chawla, private equity head with the $36- billion investment firm D.E. Shaw and Company, India’s realty industry was heading for a slowdown much before the current economic slump.
“Increasing demand had pushed up prices with speculators and investors jumping in to inflate the market. Eventually the situation became grim as speculators withdrew and buyers refused to pay unrealistically high prices,” Chawla said.
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