By Dr Sanjay Chaturvedi, LLB, PhD
Things seems to be dismal and while nothing is moving, primary market and land deals are in full swing. While talking to builders and land aggregates, the bullish mood of the industry indicates a big bullish run is expected. Land deals are happening in and around city centre. The primary market which is land and FSI is so vibrant that agents are selling projects / under constructions or stalled for a long time to builders who are having good hands on funds. Builders who either have listed themselves on Stock Exchanges or big conventional names who are chased by private equity/ venture capitalist for deployment of funds.
Even a small residential project is of more than hundred crore. Small builders of cities like Pune, Noida, Ahmedabad are very comfortable because even in this dead market, sale is happening. Break Even point already achieved and now mere profits are adjusted.
Every builder and every builder cum agent who broke for unfinished projects is busy acquiring project. Which means in next two years there will be fresh stock with new projects. Old stock and under construction projects are either sold or being sold in a process. Industry is waiting housing finance interest rates to slid down, which they already. Next will Union Budget, goodies are expected as ive states are under election fever.
Cash crunch is almost settled and demonetisation which was having notional effect on deals is gone. Affordable housing and full cheque projects never got effected as buyers and builders never depended on cash. Premium housing segments where cash was involved is making its way out.
New generation of builders are most optimistic and ready to wait or market to stabilise. Builders have already made corrections in deals and have started structuring according to buyer’s expectations. Good time ahead.