Property prices can RISE
18 Dec 2008
Mr. R Ramachandran Nair, Director & Chief Executive, LIC Housing Finance Ltd. (LICHFL) has held various prestigious positions in the past in India and abroad. He may be credited for establishing a new composite Insurance Company in Saudi Arabia Saudi Indian Company for Cooperative Insurance at Riyadh and successfully completing its IPO in 2007. Prior to his appointment as Director & Chief Executive (LICHFL) Mr. Nair was Director, Management Development Centre, LIC of India in Mumbai.
Undeterred by the current scenario and job related insecurities, Mr. Nair believes that this is just a passing phase. He supports the view that this is a natural cycle, whatever goes up, comes down.
Yes these are trying times and LICHFL is well geared for the challenges, but there are certain opportunities in this scenario says Mr. Nair in a candid Q & A session with Harsh Roongta and Bienu Vaghela of apnaloan.com
The real estate market is going through a crisis. What are your views on this and what advice would you have for a consumer thinking about purchasing his own home?
It is very difficult to predict the direction and magnitude of price movement on real estate. One can only assume that forces of demand and supply would always apply and price movement would follow accordingly. For the consumer purchasing an apartment for his own use, this could be a good time. Not only have interest rates softened, the home buyer can also possibly get a good bargain from the developer, if he negotiates well. In fact the kind of bargaining power customer is having today may not be possible in the near future particularly when interest rates have softened and property prices have spiraled downwards. If the scenario persists for 1-2 months and demand rises, the property prices can go up. Customers should positively look at the scenario as now they are getting benefited permanently owing to the negotiations across the tables which are leading to substantial cost reduction.
Independent of these factors, one factor which is a dampener prohibitive is job related uncertainties. Buyer sentiment is far from upbeat for home purchase. Pl comment.
It is more of a perception than a reality. On analyzing the various sectors in the economy, you find that there would be many sectors/ market segments which are reasonably insulated from such phenomenon. Financial Services sector is an exception in the overall economy is of less consequence. Fact and figures connote that cost cutting is happening but that is to contain losses. Small businesses are witnessing drop in profitability but are finding of tackling it. In case of low profitability we cannot pass on that to my customer but we should squeeze our margins and try to make saving of certain amount. Yes the times are tough and really smart people will be able to overcome the situation.