Mint: DLF sees property prices going up
DLF Ltd, India’s largest listed real estate firm, sees signs of recovery in the country’s beaten down residential property sector and expects prices to start firming up, a senior official said on Monday.
Still, Rajeev Talwar, group executive director at the developer, said projects needed to be priced aggressively in order to sell.
Talwar told Reuters in an interview a stable government and a view that the economy may be improving would help demand for real estate, after a property slump that analysts said has seen prices crashing by up to half.
“I think we’ve done a fair amount on price correction, realistic pricing or aggressive pricing as it may be called,” Talwar said.
“I think all Indians have imposed their faith to very immediate economic revival, rather than long term,” Talwar said.
This is something I’ve started to hear from other sources – that prices are holding. But there are still very few transactions. Construction, though, seems to be back – in Gurgaon, I see hitherto abandoned projects getting a new lease of life. This is good – getting houses complete is important, because when some of them eventually go bust, there will be something left for the vultures to buy. Let’s face it, there is oversupply in the premium segment, so some will go bust.
There doesn’t seem to be an index or any real data on the residential segment so I can’t say if prices really are holding. I see that brokers are trying their level best to keep listed prices steady. Real estate is a very slow and opaque segment so it could take months or years to really correct.
Interestingly, DLF is not quite so bullish on commercial properties. Their Andheri project in Mumbai is on the block, and it opted out of it’s Kolkata SEZ project among others.
In other news, DLF dropped 10% today, to end at 365. With a past P/E of 27, it’s not exactly cheap, but hey, residential prices are picking up!
