Friday, September 12, 2008
Considering the drop in sales of apartments and inflationary trends, realty firms are planning to foray into joint developments for construction projects by selling land parcels to other builders. Mr. Pankaj Jaju, head-real estate practice, Enam Securities said, "Metros and Tier II towns having a huge pipeline of projects have witnessed a 60% drop in sales of apartments in the last six months." Selling land parcels to other builders for joint development will enable land owners to invest in buying more land bank and increasing the supply of properties, he added. According to industry experts, real estate prices in Navi Mumbai and Bandra Kurla Complex (BKC) are expected to shoot up further by about 10-15% within the next six months if developers are not able to complete their projects on time. Besides this, raw material input costs for construction constitute 40% of total project cost. Since input costs are expected to rise further, the real estate market will witness a further dip in sales of apartments across the country.