Slump is for real

NEW DELHI: Property prices have dropped 10-15% in the past six months and are likely to correct further, according to a FICCI-Ernst & Young report on real estate. The report also says developers are not too keen on acquiring land from the government as a government auction leads to an unjustified escalation of prices.

���We have seen 10-15% correction in property prices in the past 6-8 months mainly because they had gone up too high. The extent of correction though is city and product-specific,��� says Ansal Properties and Infrastructure chairman and Ficci real estate committee chairman Sushil Ansal.

He says land prices too have fallen 10-15% and the brunt of it is being borne by developers. ���Farmers are not reducing their prices. They are just holding on resulting in developers��� margins getting squeezed,��� Mr Ansal said.

According to the report, 62% of developers foresee Indian real estate embarking upon a high growth trajectory in the long term despite the slowdown witnessed over the past 12 months.

Rising interest rate is a major concern for developers, who feel any further rate hike would have a damaging impact on housing sector. The non-availability of quality manpower is another major concern for most developers.

The report also calls for the setting up of a regulator for real estate. ���We are an overregulated industry. There is too much of bureaucracy for us to handle. That���s why there is a need for a body, which can facilitate a single-window clearance for developers,��� Mr Ansal said.