Saturday, May 24, 2008

Times of India and Builders desparate to raise prices

First it is the Times of India which predicted a rise in housing prices due to higher input costs. The very next day the KOAPP has said an 8% rise in prices is inevitable due to the same reasons. The bottom line is that builders are trying to create a FUD (Fear, Uncertainity and Death) phenomenon in the bangalore market. Similar things happened in Pune last month where PBAP has gone on record saying they will hike prices. Instead of passing the increased costs to the consumer, why dont the builders lower the land bank prices which are quoted by the land owners. In a heavily politicized business the builders are beginning to feel the pinch.
Below is the Times article

Realty prices may go up in Bangalore TIMES NEWS NETWORK

Bangalore: A bullish inflationary scenario, ever-rising commodity prices, hardening of interest rates and strengthening of the rupee. These are the key factors that are making real estate developers in the city wake up to hard realities. Despite all these odds, realty players, so far, have been trying to have their feet on the ground shielding severe competition in terms of price pressures and uneven demand and supply conditions.

City realty developers have now decided to pass a portion of their burden to their patrons, realising the fact that they cannot afford to bleed anymore.

According to well-informed realty sources, the developer community is mulling a end-buyer price hike of 3% to 7%, to take a bit of respite. The price rise will impact all kinds of projects across the city in various stages of development. “Depending on stage of construction, the percentage price hike will vary. First only an incremental rise will be passed on. If the market situation continues to remain the way it is, another rise will take place,’’ said a source.

In the last 9 to 12 months developers in city have borne an input cost rise between 20% and 30%. Rising prices of steel, cement and labour have been driving input cost higher.


Inputs costs rise between 20% and 30%

Rising prices of steel, cement, labour drive input costs higher

Real estate price may therefore go up between 3% and 7%


Anonymous said...

Times of India is running magicbricks site so they have to support the higher realty prices else who will advertise on this site.

Anonymous said...

Yes. TimesOfIndia news paper is completely being used by builder lobby to promote news about real estate boom.

TOI is also supporting this, one because of this nexus, and two, because it keeps getting many big project advertisements and good profit.

IF TOI exposes reality, then it will loose money from all these ads. And no. of ads is a major reason people buy TOI.

So keep in mind that TOI is a media tool being used cleverly to plant favorable news bu builder lobby.