Even as realtors remain upbeat about the growing demand in their sector,the industry stands divided over a possible correction in the skyrocketing prices of residential properties in major Indian metros.
Over the last few years,property prices in most Indian cities appreciated by over 250 per cent while the economy grew at 8 per cent annually.
“The spiralling prices in real estate,especially the residential segment,is a big concern today. Such a sudden rise in property prices is not sustainable and there is an immediate need for correction,” Mahindra Lifespaces vice-chairman Arun Nanda said.
Some correction in property prices is expected over the next few months,he added.
“A few builders have become greedy and are running a cartel. Those who have increased prices are not doing any business. There has to be a correction somewhere,” Nanda said.
The government should come out with special schemes for affordable housing so that builders can get land at reasonable rates,the Mahindra official said.
However,Niranjan Hiranandani,chairman of Hiranandani Developers,said that a correction in prices is unlikely in the near future.
Nevertheless,there should be housing schemes for all segments,he added.
“The government should come out with schemes for every segment. Let’s create houses for all and this is not difficult…we have done this in telecom and other sectors and were successful,” Hiranandani said.
“Huge investments have been made in the sector and the bubble is going to burst. However,(this will) not (happen) in the near future,” he added.
There should be more development in the infrastructure segment to support realty,he said.
Advisory and research firm Jones Lang Lasalle Meghraj’s country head,Anuj Puri,also said there were no signs of an immediate correction in residential prices.
The outlook on residential segment was positive as many expected 2010 to be the year of affordable housing.