Realtors fear fall in demand for slump

JAMSHEDPUR: The first six months of 2012 turned out to be bad for the real estate sector with one crisis after another dogging the industry.

At a time when the real estate players were finding ways to tide over the Chhotanagur Tenancy (CNT) Act 1908 crisis and Sanjeevani Buildcon fraud episode, the economic slowdown has just hit them hard.

"With production activities in the surrounding companies taking a hit owing to the economic slowdown, the real estate sector cannot remain insulated to the turmoil in the market," saidJamshedpur Builders Association chairman Kushal Singh adding that the first six months (of the year) had proved crucial for the real estate industry.

He said at a time when the industry was scouting for funds to finish its unfinished projects in the wake of banks stopping loans for building projects, the current economic slowdown would only augment the woes.

"The ongoing projects outside the purview of the CNT Act provisions will be hit with potential clients now thinking twice before booking a flat," said Singh.

He, however, said compared to the metro cities effects of economic slowdown on the real estate business would relatively be less in the tier II cities.

"In smaller cities like Jamshedpur and Ranchi, people tend to spend their hard earned money for booking a single flat unlike in metros where high income populace book more than one flat from investment point of view," said Singh.

According to industry insiders, over 80 projects, including small and big, which are under construction in Jamshedpur and adjoining Adityapur are likely to be affected by the slump in demand.

"Out of the 80 projects, over 30 projects are such where over 60% of the units (flats) have been booked thus far," said a city based builder. A cross section of the real estate players has said Sanjeevani buildcon fraud has also hampered the image of the industry.

"Following the fraud in Ranchi, several builder and promoter firms in Jamshedpur and in Ranchi had to work hard to clear doubts from the clients," said the builder's association functionary.

Source:timesofindia.indiatimes.com