Why did the China-based Ever Grand real estate firm crash? Not because of building apartments, but due to poor sales. The question whether the Hyderabad realty will face hard days ahead gives the obvious answer “Yes” because of the drop in sale of properties to below normal.
UDS and pre-launch sales occupy lion’s share of the total sales transactions. As a result, builders, who normally build only 100 flats, announced sale of 1000 flats and upfront collected full cost of the flats. Meanwhile, the cost of construction has increased on one hand and the bankers on the other have reduced lending money to such projects. As a result, builders find it difficult to proceed further with construction. That is why, many realty firms have been facing Herculean task to sell their flats. Their problems are likely to compound further, if UDS sale of flats and pre-launch are not stopped immediately. To overcome the bottleneck, the government should interfere to stop the unhealthy practices.
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