Ravi Karandeekar's Pune Real Estate Market News Blog: This is the first phase of reduction in (real estate) prices, says HDFC chairman, Deepak Parekh

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Monday, October 8, 2007

This is the first phase of reduction in (real estate) prices, says HDFC chairman, Deepak Parekh

"There has been a slowdown across the country (India) and there has also been softening in a few cities.

The speculators — those who buy when the building is coming up and leave when the building is ready — run out of the market.

I feel that in the commercial side, and even shopping side, India is building excessively and this supply will hit the market next year. This is happening in cities like Hyderabad, Pune and Chennai.

As a result of the investors getting out, sales have slowed down but developers have not reduced prices in any region except a few areas such as Pune, Gurgaon and in Whitefield in Bangalore.

In most places, builders are holding on, they are sacrificing sales rather than reducing prices. This is the first phase of reduction in prices. If sales do not happen, builders are not going to stick with completed stock and they will have to sell it." this is Mr. Parekh's answer to the question "Where do you see real estate prices?" in an interview in The Economic Times.

Mr. Deepak Parekh also talks about a connection between a surge in stock market and a rise in property prices, reduction in prime lending rate, issues created by appreciating rupee (or by relentlessly falling US dollar), and of course, HDFC'S experience with reverse mortgage product!

Since property price or real estate rates and HDFC are the most popular search terms on my blog, i am sure, you will be more than happy to read Mr. Deepak Parekh's interview.

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