Property prices likely to escalate, believes Godrej Properties

NEW DELHI: Godrej Properties has predicted that the realty prices are likely to rise further in cities other than Mumbai and Delhi in the next two months on the back of a stupendous demand across the country. This price-rise is believed to be based upon location and other amenities. However, the extent of price rise is too complicated to predict.
Realty prices in South Mumbai and Delhi are already inflated, but it is recovering in cities like Bangalore and Pune since the fall in October 2008, and hence, there is a lot of scope for the prices to shoot up.
The current surge demand is mainly from the middle-income class segment. Both investors as well as end-users are there in the market. However, projects bearing good and trusted brand names are attracting more customers.
The view that Godrej Properties shares might emanate from the fact that the company has sold 200 flats in the first two days of launch on October 23 in the National Capital Region (NCR).
However, it was not only demand, the rise in raw material costs would also fuel the prices of real estate further, he said and hinted that firms would not absorb the cost push but pass it on to the consumers.
The raw material price rise is a concern for the realty firms. As is the rising interest rates. But, on the back of a strong economic growth, demand is not likely to be subdued. Hence, there is no worry about profit margins.