The temporary drawback created with the recent economic slowdown in the global and local markets have forced property developers to think wisely and be more strategic. The Sunday Times spoke to Mr. B. Premalal, Chairman Prime Group of Companies, to find out the current position of the property development market.
What is the current position in the domestic property market?
After several months of stagnation, the local property market is correcting itself. In other words, the artificially created exorbitant prices have crashed due to own issues. General prices of real-estate have come down. However demand would increase with the possibilities of the war ending soon and the interest rates going down.
What made the real-estate
market to get so affected?
The entire world economy including Sri Lanka came down due to various meltdowns. Adding more to it, the prices also went up due to certain companies fighting for the same piece of land creating an artificial demand. What happens is that these bidders create an undue demand pushing the buying price further up, allowing many middle men in the purchasing process to increase the prices further. So, once such land is acquired at high prices added with developing costs and other margins, the selling price reach unimaginable levels. Nobody will like to buy an overpriced real-estate in such market conditions.
How did the market correct itself and what is the buyer's trend at the moment?
During the last 4 -5 months the prices started coming down and we knew that it will get stable soon. The increased prices forced buyers to move away from the real-estate and invest in other avenues such as fixed deposits anticipating a high return. Those who were looking for a housing loan was scared to take one as the rates were very high. Providing correct land at the correct realistic price and also introduction of interest reductions and easy payment schemes has become the key to arrest situation.
How did you manage to survive under such crisis?
We expected the prices to come down and got ready to face such a situation well ahead before the crisis reached us. We were very careful of what we buy and the price we buy at. The wrong land and wrong pricing could ruin the entire venture at any level. Therefore we kept our costs low at all times and the benefits were passed on to the customer. We also eliminated the middleman in construction, advertising, purchasing and thereby reduced the total costs of our projects. Our administration and finance costs are well managed. Depending on our own funds to run the business was another reason to have the business going with minimal damage and that's why we are successful even at tough times.
What is your present position?
We are very positive and we believe that land should have the realistic value. Over and exorbitant prices should come down. After all customers are not willing to pay for keeping margins by the middle men and unnecessary organization costs such as overhead costs, construction costs, finance and advertising costs.
The realistic prices should prevail and it would also help the average person to own a piece of land. Further people have lost confidence in investing in financial assets such as buying shares and investing in fixed deposits at financial institutions. Some people have already lost their investments. As a result now people have realized the real value of real assets such as lands and properties. They have now started to purchase lands. That is where Prime Lands is in a very strong position as we purchase our lands at a correct price eliminating middlemen. Therefore we are in a position to give our customers lands at very realistic price and there by people can own land for their own use or as an investment.
What are the real-estate projects that you are currently working on?
We have lands in Athurigiriya, Kotmale, Kengalla in Kandy, Panadura, Colombo 05, Kotte, Ratmalana, Padukka and many more are to come up soon. All these projects have their own target market and the demand pattern. Another company under our umbrella is Prime Homes International (Pvt.) Ltd which is located at Mahabage, Wattala. This is a luxury housing project out of which 40 units have already being sold out and only ten more is available at the moment. An unprecedented success with a 12 year dedicated service made us a remarkable real-estate solutions provider. We pay maximum attention to our customers to make sure that we provide everything they need to make their lives easier, comfortable, and fulfilling. Our primary motive is not profits, but to create better place on earth. G.P |
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