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Thursday, July 19, 2018

‘Sales are definitely happening,but less’

Assotech has already handed over 5 million square feet built up area through his various constructions and has close to Rs. 16 billion worth of projects...

Written by Praveen K Singh | Published: March 28, 2009 10:17:42 pm

Sanjeev Srivastva,MD,Assotech Limited,believes that the though the low market sentiment has caused some of the buyers to defer their plan of buying a property,however,old bookings are rarely being cancelled by the buyers.

Assotech has already handed over 5 million square feet built up area through his various constructions and has close to Rs. 16 billion worth of projects under various stages of development and execution all over the country.

Srivastva points out that the sale is definitely taking place,though on a lower note.

Excerpts from a conversation with Praveen K Singh:

Are realtors being squeezed by both a fall in new demand and few takers for built properties?

The real estate market is just responding to short to mid term global and local economic factors. It is not true that the demand has dried up completely.

The low market sentiment has caused some of the buyers to defer their plan of buying. Old booking is very rarely being cancelled by the buyer and that too on grounds of his job loss coupled with considerable stress on his limited savings. Sale is definitely happening,though on a lower note.

Will prices fall further? Are there markets where there is an over supply?

A uniform price correction pattern cannot be mapped as correction hinges predominantly on factors like location,demand,supply and the developer’s financial ability to weather the storm in the current economic slowdown. There is no scope for further correction in prices unless a builder wanted to incur loss. No one would want to sell below production cost and no bank funding can be got once that happens.

I don’t think there is any over supply in real terms. If you are referring to ‘unsold stock’ as over supply,then it’s only because of temporarily reduced buying power of customers. Once the economy picks up,sales will happen and the so called ‘over supply’ of stock would vanish away in no time.

With the price war on escalation,how Assotech is restrategising its business model?

We firmly believe that quality of construction,timely delivery of property,after- sales maintenance and brand tag of our organisation have always been of paramount importance to our customers. Assotech has never been a part of the price war but we have always tried our level best to honour any government initiative to boost demand in the Indian economy. As soon as the government announced a limit of Rs. 20 lacs for priority sector lending in the real estate sector,we introduced small ticket sized apartments in our residential projects. In Ghaziabad,we have flats starting from Rs. 20.50 lacs. In Rudrapur,our price start from Rs.9.90 lacs and in Gwalior,the price starts from Rs. 7.90 lacs onwards to cater to the ever growing demand of affordable homes in India.

How was your performance as per the third quarter results? What do you expect in the Q4? Has there been fall in net profits on YoY basis?

Looking at the gloomy economic conditions,we could perform up to our satisfaction even during these tough times. Things have started picking up in Q4 and we expect reasonable profits during the current year also.

Doesn’t the industry need a regulator to check malpractices?

Exception can never become rule. There might be some companies who are not transparent in their operations,but most of the companies stick to transparency norms and are as good as companies operating in other trades. To protect the interest of all stake holders like end buyers,investors,developers and agents,a regulator is welcome. However,if it ends up in creating another layer of controls and licensing,then it will not be of any help to anyone including the end buyer.

What ails the industry? What according to you can be the futuristic measures?

Exception can never become rule. There might be some companies who are not transparent in their operations,but most of the companies stick to transparency norms and are as good as companies operating in other trades. To protect the interest of all stake holders like end buyers,investors,developers and agents,a regulator is welcome. However,if it ends up in creating another layer of controls and licensing,then it will not be of any help to anyone including the end buyer.

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