Housing Demand Strong, Prices to Grow: CREDAI

New Delhi, Mar 16 (PTI) Housing demand continues to be strong and is expected to grow further on the back of tax incentives offered in the Budget and a recent repo rate cut, CREDAI President Boman Irani said.

CREDAI is an apex body for private real estate developers.

In an interview with PTI, Irani asserted that there are no signs of demand slowdown in the Indian housing market, rather it will continue to rise in the long-term horizon.

However, he said there could be an impact in some markets that are "over-heated" but overall at pan-India level there are no concerns at all on the growth going up only. Short-term blips in a real estate cycle is not something that we need to worry about. We need to see long-term growth," he told PTI in Nashik, where CREDAI recently organised its two-day conference.

Asked whether the frenzy and euphoria seen in the last three calendar years has subsided, Irani said, "I don't think so."

He cited the property registration data of Mumbai market for February this year to prove his point that demand remains intact.

Registration of properties in Mumbai municipal region remained flat in February at 12,000 units.

Irani said the tax incentives offered in Budget and a recent 25 basis points reduction in repo rate would improve housing demand.

"One of the boldest moves that I have seen in the recent past is the present Budget where the government has announced it will not tax income up to Rs 12 lakh," he said, adding this will improve the purchasing power of people.

The CREDAI President said the government has been focusing a lot on infrastructure and this is creating new business opportunities for all segments of the real estate sector including housing, office, malls and warehousing.

On housing price outlook for this year, Irani said it will be similar to inflation level.

"I have been saying, price increase is not in developers interest at all. We are very happy with inflation related cost increase only. We believe in velocity. The better IRR comes out from quicker turnaround of projects than by taking the prices up."

"There will be more than inflationary increase in prices for sure, because I think supplies have come down," Irani said.

He noted that real estate developers will have a better profit margin by fast execution of projects.

Therefore, he said, the association is focusing a lot on adoption of new technologies that can help in completing projects faster without compromising on quality.

CREDAI President-Elect Shekhar Patel said the association is giving a lot of emphasis on promoting green real estate and also skill development.

He said the CREDAI is also making significant contributions on the CSR (corporate social responsibility) front.

Patel said the CREDAI has decided to upgrade 1,000 government schools across the country to mark the 25th foundation day of the association.

In these 1,000 government schools, CREDAI in partnership with an NGO, will set up smart classrooms and also make a provision for supply of quality water and modern toilets for students.

Established in 1999, Confederation of Real Estate Developers' Associations of India (CREDAI) represents more than 13,000 developers across 230 city chapters in 21 states.