Godrej Properties to ET NOW: Real estate demand has seen strong bounce back

Godrej Properties in an interview with ET NOW said that the realty sector was reeling under a downturn for 8-9 years, but affordability now is very high and buyers realise importance of home ownership.

KEY HIGHLIGHTS

• Godrej Properties: Real estate industry is still in the beginning of the upcycle, price hikes will follow later
• Godrej Properties: Need to ensure volumes are steady with dip in inventory before considering price hikes

The realty sector was reeling under a downturn for 8-9 years, now affordability currently is at an all-time high and demand is back as buyers realise importance of home ownership.

Here are the key takeaways from the ET NOW interview with the management

• Realty sector was reeling under a downturn for 8-9 years
• Affordability currently is at an all time high
• Pre-Covid also, prices were stable and had not seen any increases
• If we look at prices in the sector adjusted for inflation, it has fallen
• Demand has picked up very significantly recently
• Affordability is high and mortgage rates are very modest
• Q1 did see a sales dip due to the second wave
• Q2 onwards we are seeing a strong demand bounce back
• Seeing a very strong bounce back in demand across most major metros
• Inventory levels have come down significantly across major markets
• Inventory levels have reduced as newer launches has been subdued
• Pricing power will take some time to revive, volume growth has to revive first
• Believe meaningful price hikes may still be a couple of quarters away
• Need to ensure volumes are steady with dip in inventory before considering price hikes
• Response to launch in Bengaluru market has been very strong
• Mumbai Panvel project launch is also on track
• Steel and cement price hike impact on bottomline is quite limited
• We are passing on small cost inflation onto customers even now
• Typically target 4 -5 launches every quarter
• Tend to test pricing at almost every launch post significant research
• Real estate industry is still in the beginning of the upcycle, price hikes will follow later

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Source: www.timesnownews.com