DLF rises again!

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DLF rises again!

There's no denying the once battered real estate sector has shown rather strong signs of recovery. CNBC-Tv18’s Nayantara Rai caught up with DLF’s Group CFO Ashok Tyagi to understand what the country's largest developer made of the realty sector's resurrection.

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Excerpts from India Business Hour on CNBC-TV18 Watch the full show »

There's no denying the once battered real estate sector has shown rather strong signs of recovery. CNBC-Tv18's Nayantara Rai caught up with DLF 's Group CFO Ashok Tyagi to understand what the country's largest developer made of the realty sector's resurrection.

Tyagi said, "The residential sector is the one that has led the recovery and what we have seen in the last 12 months is that prices have bounced back by 20-30%."

While residential prices in Mumbai and Gurgaon have almost reached the peak 2007 levels, commercial real estate continues to be under pressure. Tyagi says the charge in the residential segment is primarily due to pent up demand.

Tyagi adds, "Clearly sales and volumes at these prices are higher than 15 months ago when prices were relatively lower. So there is a huge absorption power in the market."

But there maybe some good news for all planning to buy an apartment. DLF doesn't think the recent surge in prices is sustainable, and goes on to say prices have stopped heading north.

During the economic meltdown, realty companies tried to lure customers by selling apartments in the Rs 20-40 lakh bracket, a segment that became popularly known as affordable housing. DLF also talked of launching value housing, that is apartments in the sub-15 lakh rupee category. But now that the premium and luxury housing have bounced back, will developers continue to concentrate on the low-margin affordable housing segment?

Developers are now hoping that commercial real estate also bounces back.

Also watch the accompanying video.