Slow sales and market resistance to the high cost of residential space have seen developers slow down the pace of projects. Developers, who blame high land prices and input costs for the increasing cost of developed space, say they are going slow on land deals, cutting back on projects and even prefer to back out of joint ventures.
Irrespective of who or what is responsible, all acknowledge that high land prices in most cities have contributed to the projects being unviable. Fresh supply of developed space is bound to fall over the next year or two leading to a correction in land prices.
When the market is resisting the rising trend in developed space prices it is only logical that there will be resistance to land price increases, say developers.
Survey results
A recent survey by international property consultants Cushman & Wakefield points to a slowdown across cities.
In Bangalore, for instance, the report says “end-users and investors over the past six months have adopted a cautious approach in purchasing residential plots, apartments, villas, etc in Bangalore.”
As for the North, the report says the suburban locations of Gurgaon and Noida witnessed only a marginal appreciation of two per cent over the quarter. End-users as well as investors have adopted a wait-and-watch policy in anticipation of correction in apartment prices and home loan interest rates.
Source: Sify.com 11/May/2008
