The other day I was speaking to a builder and invariably the conversation meandered towards the hot topic of the day – recession.
Though reluctantly but he did admit that there was recession in real estate sector. “I am not sure what this is but everyone these days are asking for low-price houses and I just can’t understand how to make them. After all the constructions costs have not gone down at all,” he said.
“Now the point is where do I compromise? Obviously, I can’t do it on the quality of the raw materials. If I do that my reputation will suffer and if I don’t I will have to bear losses. As of now I am bearing losses but for how long that I don’t know.”
He may be not wrong for there are many such small or medium scale builders who are feeling the pinch.
No wonder the government has announced sops in the form of cheaper loans and slashing of interest rates. But, what remains to be seen is how far would these be effective.
Still, I would say that this is the right time to buy a house considering the drop in prices – even though they may not be so acute.
P.S (only for the filthy rich): Today someone told me that the rent in capital’s upmarket Nizamuddin area is around one lakh a month. Now, now, if you can pay that amount of rent why not buy a house instead.
Hello world!
2 years ago
2 comments:
Dear Mr Arsalan,
I don't know why, but somehow I cannot come around to sympathising with the buliding lobby. Call it my warped thinking or middle-class mindset, but I have always felt uneasy praising a builder. This recession thing has hit us only in the last couple of months. Before that the market was booming and not a single builder worth his salt was willing to give even a miniscule discount. We talk about builders bearing the brunt of recession now, but why don't we talk about the crores stashed away in their foreign accounts. Why don't we talk about the fact that they were multiplying money like anything, going on a 'land buying' spree and launching projects one after another.
It is well-known that the profit margins in the business are pretty high and a conservative estimate would peg it around 50-55 per cent. Come to think of it, they were literally fleecing the gullible customers hiding behing the garb of rising raw material costs.
So now when they are 'losing' some money --- and I mean their profit margins have come down a bit --- why should we sympathise with them. Mind you they are still 'holding up' the prices waiting for the tide to turn.
I'd say that some small, upcoming builders bit more than they could chew and they are the suffering for that folly.
So, don't feel sorry for the building community. They've sucked our resources enough.
PS: Your comment that Rs one lakh is being charged as rent in some upmarket Delhi locality...and might as well buy a house of your own, is quite a warped thinking.
I'd say 'East is East and West is West'. Don't compare the two. Lakshmi Nagar or Indira Puram is not Nariman Point or Linking Road.
Cheers
• Piramal Enterprises to mull merger of Piramal Cap and Piramal Fin with Piramal Housing.
• Tata Steel may bid for Essar's Hazira plant.
Currency Tips
Post a Comment