BHUBANESWAR: With the housing market in the grip of a prolonged slowdown and no signs of its immediate revival, many small developers in the city are abandoning projects fearing further loss.
A developer had obtained permission from Bhubaneswar Development Authority (BDA) for two duplex projects, one near the Pipili-Konark bypass and another near Jatni through sharing agreement (in which a developer signs a deal with the land owner to provide a fixed share of the housing project).
The group had obtained BDA's permission in 2012 and had three years till 2015 to complete the construction. "We had invested a few lakhs for preliminary development of the land. But after poor response, we cancelled the agreement with the land owner and returned the land to him," said Srikant Rout, a promoter of the real estate firm. The group had planned 26 duplex at one site and 18 units at another.
Market insiders said this pattern of developers forsaking projects was not an isolated case in the city. "It is a general go-slow approach for all as the market is almost stagnant. However, we are still optimistic. Generally speaking, developers are trying to complete under-construction projects instead of starting new ones," said Umesh Patnaik, president of the Association for Odisha Real Estate Developers (AFORD).
AFORD had organized a property expo coinciding with the Union budget from February 27 to March 1. Though the footfall was encouraging footfall, none of the enquiries have translated into actual sales. "We had timed it with the budget hoping that some positive announcements in the budget would improve market sentiments resulting in increase in booking of housing units. This has not happened as yet," Patnaik said.
Observing that there was no immediate sign of market revival, Real Estate Developers' Association of Odisha (Reda) president Pradipta Biswasroy said that despite the continued recessionary trends, the market for low-cost housing remains robust.
"The problem is that most of the houses were created targeting the high-income groups where the profit margin is higher. But I think if we concentrate on houses for lower middle classes, the market will improve. The profit margin may be less but there is easy flow of funds from banks and there are buyers in these segments," he said.