Homebuyers Continue to Absorb Price Hikes as Demand Remains Strong: Prestige Group's Irfan Razack

Prestige Estates is navigating a complex market by carefully managing price increases amid rising input costs, according to CMD Irfan Razack. He notes that underlying demand remains robust, with recent launches performing well and the company on track to exceed its ₹25,000 crore booking target for the financial year. The firm plans to launch new projects in the NCR market in the coming quarters, banking on sensible pricing.

Irfan Razack, CMD of Prestige Group, expressed confidence that robust housing demand will help the real estate sector navigate rising inflation, stating that buyers continue to absorb moderate price increases despite cost pressures. “The demand was quite amazing, and the overall uptake was good,” Razack said, citing recent project launches in Bengaluru. He added that real estate remains a “very rigid asset class,” where pricing does not fluctuate sharply, and genuine homebuyers continue to purchase even amid rising costs, anticipating further affordability pressures if they delay.

While demand remains strong, Razack acknowledged that developers are facing rising input costs. “Things like commodities, first of all, price has gone up. Secondly, very soon we'll be in short supply of simple things just like tiles because there's no gas,” he said. These pressures, he noted, affect margins on pre-sold projects but are likely to remain “short-term phenomena.”

On pricing strategy, he emphasised a balanced approach. “We have to be very conscious of how we price a product, bring it to the market, at the same time, get the interest of the consumer,” he said, cautioning against aggressive hikes that could dampen demand. He expects inflationary pressures to normalise over the typical three to four-year project cycle, reducing the need for regulatory relief.

Financial performance remains strong. Prestige Estates has already exceeded its ₹25,000 crore booking guidance for the financial year, with Razack indicating the final tally could approach ₹30,000 crore, depending on the timely launch of a key Hyderabad project. “If that happens, we'll go way past it,” he said.

Bengaluru-based Prestige Estates Projects has a market capitalisation of around ₹50,481.58 crore, with its shares down nearly 3% over the past year. In the National Capital Region (NCR), the company continues to see solid traction. The “Prestige City Indirapuram” project has achieved around 90% sales, with construction progressing rapidly. The company has also secured new land parcels in Gurgaon and Noida, with launches planned in the second quarter of the upcoming financial year.

Razack remains confident about upcoming projects, stating that well-designed and sensibly priced developments will continue to see strong demand. “If we've designed it sensibly, if we price it also sensibly, it will meet a great demand, and we'll get a similar response,” he said.