The real estate sector has been soaring on the basis of robust demand. However, rising input costs have impacted the real estate developers and clipped their wings.
To gauge how developers are handling the rise in commodity costs, CNBC-TV18 caught up with Prashant Bindal, chief sales officer, Macrotech Developers, and Gulam Zia, senior executive director, Knight Frank.
Bindel affirmed that demand remains robust across categories and price points. He pointed out that if there is genuine demand, then the market bounces back subsequent to a small blip. He shared that the company will be selling 10,000 units this year as compared to 6,000 last year.
He said, “To bring structure or discipline to the price increase we have decided that we have increased the price twice until there is something very substantial; one in April and the other in November.”
On prices, he mentioned that the company will increase them by 4-5 percent in the next few days.
Zia of Knight Frank, believes reputed developers have the ability to pass on price hikes to consumers. He stressed the importance of sustenance of growth in sales.
He said, “Well-known developers have the ability to pass it on (price hike) to the consumers but that is not possible for tier-II or tier-III level developers, which is pretty evident.”
On the affordable housing segment, he said that it continues to do well. However, he cautioned that rising prices and the possibility of stamp duty hikes could put a question mark on affordability.
He said, “Affordable housing continues to do well in Mumbai irrespective of whatever is happening. However, let us also not forget about the state government talking about rising the stamp duty or taking a percent or two extra, all that can perhaps have a question mark on affordability and whether the consumers will continue, half a decade of pent-up demand will continue to convert into a transaction or not – time will tell, but for the moment I am not so worried about whether there will be consumers going forward.”
For the entire discussion, watch the accompanying video