Lodha says it sold Rs 150-160 cr new property in last 10 days

November 22, 2016 Money Control

Lodha says it sold Rs 150-160 cr new property in last 10 days

The announcement of the ban on Rs 500 and Rs 1000 notes came as a rude shock to the real estate sector. According to reports, the sector is in stress and the real estate prices may fall almost by 30 percent over 3-6 months.

On the contrary, Abhishek Lodha, MD of Lodha Developers says that it is unlikely to see overall decline in realty prices.

In conversation with CNBC-TV18, Lodha said people are taking into account the fall in (deposit rates) interest rates by 150 bps points in the next 12-18 months and also the fall in easy monthly installments (EMIs). Hence, people are positive on buying.

He also said that the company has sold about Rs 150-160 crore of new real estate in the last 10 days.

He also said projects, where involvement of cash is more, may see price decline.

He further said that (banks and NBFC) institutional funding to real estate is 90 percent or even higher. With respect to Benami Properties Act, Lodha said that it will bring more transparency which will allow people to participate in the market. It will be healthy for the economy and also the real estate.

Below is the verbatim transcript of Abhishek Lodha’s interview to Prashant Nair & Ekta Batra on CNBC-TV18.

Ekta: In your opinion there shouldn’t be any correction in real estate prices at all considering that demand is still there and enquiries are still happening or do you expect at least selective real estate to correct probably based on distressed sales?

A: I think CNBC, you guys understand the economics of this whole of the demonetisation exercise better than me. However, from what I can understand pricing is determined by supply and demand. Except for pockets which have very high involvement of cash, there are certain pockets for example in North India where there is a high involvement of cash which is not the case in Mumbai or Bangalore. So, where there are various very large component of cash there may be an impact. However, other than that overall if you see the fact that most people now expect interest rates to be down by about 150 basis points over the next 12-18 months, if you would have that kind of stimulus you expect demand to remain fairly good or even strengthen.

Ekta: Are consumers holding off on the expectation that there could be a correction in real estate prices? Is there some anticipation of that happening from the consumer point of view and hence there is a higher negotiation which is taking place as well?

A: Having heard everything in the media and watching your channel, watching other channels, watching other expert’s people definitely have this question on their mind will real estate prices come down. So, that is definitely a part of the conversation. Over the last 10 days we have sold about a Rs 150-160 crore of new real estate which is for a 10 day period fairly good.

What we see is that people come in with this question, they equally are now starting to hear over the last five-six days about the fall in interest rates and both these questions are in their mind. They will discuss this, so this is more of a discussion point than it was before November 8th. However, as they think through the discussion I think decision making while it takes a little bit longer as they analyse this I think the outcomes ultimately seem to headed in the right direction.