Optimism or Denial in the Indian Property Investment Market?

Optimism – or Denial? Indian real estate magnate Niranajan Hiranandani does not expect property prices, which have dropped by about 25% in the past year, to decline any further. “Rates have fallen by about 10-25 per cent over the past year-and-a-half. I do not expect rates to fall any further. So, I think people should start buying homes now,” Hiranandani Constructions Managing Director Niranjan Hiranandani said last week.

Niranjan Hiranandani - Calling "bottom" since the downturn began.

Describing ICICI Bank’s step to cut interest rates on new home loans by 0.50 per cent as a “good move”, Hiranandani said demand for property had begun to pick up now. “People do want homes. I think the SBI’s 8 per cent interest rate and the ICICI Bank reducing home-loan rates is a good move. Demand for property has begun to pick up now,” he said. The next three to six months would witness a further rise in demand by around 25 per cent, he said.  However, it would take a “full year” for the residential segment to see a complete revival, he said, adding the sector should begin to perk-up after June. Economic Times India. Just exactly where he gets this time frame from is a mystery and we can only assume that Mr. Hiranandani has some sort of divine inspiration working for him.Either that or this was just a prayer to the property gods.

Property developers have been calling bottom since the downturn began and the reaction to this statement was negative from just about all concerned. My favorite comment is “Mr. Hiranandani, you already lost 82 prospective customers just in 18 hours since this article is published. Make some more such statements and you will loose 1000s of prospective buyers. Then you can keep playing with your ‘Investors’.”