With the global meltdown badly affecting the real estate industry in the state, especially in Chennai, builders and potential consumers are adopting a 'wait and watch' strategy before purchasing property, according to industry experts.
"People who have bought land are waiting for the right time to construct as the cost of construction material has gone up," Navin Housing and Properties managing director R Kumar said.
Though the meltdown has had a huge impact on the industry, the company's projects are on as scheduled. "Since April 2008, we have projects ranging between Rs 35 lakh (Rs 3.5 million) to 1.5 crore (Rs 15 million)," he said.
Chief marketing officer of www.indiaproperty.com portal which gives a platform for builders and customers), K Gopalakrishnan said, "the meltdown has made potential customers postpone purchases."
Though cost of plots priced between Rs 50 lakhs (Rs 5 million) and Rs 1 crore (Rs 10 million) have been hit, there is still a demand for plots priced between Rs 15 lakhs (Rs 1.5 million) to Rs 40 lakhs (Rs 4 million)", he said.
The portal, in order to help consumers recently launched a campaign based on 'affordable housing concept', he said.
"This concept has been launched for people who prefer to buy plots ranging between Rs 15 lakhs to Rs 40 lakhs" he said.
"The affordable concept campaign was launched only two weeks back and today we are seeing a very good response for it", Gopalakrishnan said.
However, the portal had also witnessed some slowdown from NRIs, he said, adding that the company had projected that the impact of slowdown would prevail in the industry till the end of 2009.
Pointing to the depreciation of the Indian rupee, he said a lot of NRI's were also remitting their amount (in India). "We are watching it carefully as NRIs, particularly from UK and US prefer to visit only during December", he said.
Due to the meltdown, cost of construction material, transportation and price of PVC pipes have shot up by 10 per cent, Builder's Association of India Southern Centre chairman M K Sundaram said.
"The industry has come to a 'standstill' as customers and builders are adopting a 'wait and watch' strategy to see if the cost of land will come down or not," he said.
Stating that demand for land in US has dwindled and supply was 'more', he said the situation in Tamil nadu was the opposite with more demand and less supply.
To a query he said, many builders were also hesitating to purchase land these days, as the market had become volatile.