Bengaluru, November 24, 2015: The real estate market previously suffered a major blow due to the dipping economy of the country. Thankfully, with significant changes in the financial and social growth of the country, the confidence of the sector improved with homebuyers preferring to invest in larger homes across cities and a decent luxury house in India. Improvement has also been witnessed in economic conditions along with government strategies and initiatives towards increasing the purchasing capacity of the individuals. It has paved the way for faster growth in the coming months.
l Growth in India’s property market
One has noticed that the real estate market in India began showing signs of improvement with sales in the top eight cities. As each city has been generating 17 per cent year-on-year in the July-September quarter on the back of positive macroeconomic factors. It was observed that sales in the second quarter of the current financial year shot up from 57.8 million sq ft to 67.9 million sq ft. However, the sales volume slipped marginally compared with the earlier three months. Industry experts claimed that discounts and freebies by developers at the onset of the festive season boosted some inquiries and higher conversion rates, which helped improve the sector’s performance. People were interested in buying a luxury house in India.
l Decline in commodity prices
A drop in the prices of commodity has favoured the developers by bringing down their cost of construction. It has kept the end user’s interest intact. Apparently, in the second quarter of FY15-16, the weighted average price of all the major cities in India stood at Rs 6,491 per sq ft, with the rise of a meagre 1% both annually and quarterly. It was revealed that a sudden decline in home loan rates due to a base rate cut by the Reserve Bank of India (RBI) came as a pleasant surprise and increased overall sentiment in the Indian real estate sector. After the rate cut, some of the housing finance companies and leading banks reduced interest rates on home loans by nearly 25 basis points.
l Market research of the current real estate sector
The performance of the Indian real estate sector during the second quarter has been highly commendable. It encourages and reflects an air of optimism. As the fluctuating price levels kept users’ curiosity intact, the fall of interest rates leads to an increased number of inquiries. Market research experts claim that the developments at the macro level seem promising, and it is likely that the year will end on a positive note for the residential realty sector. According to a research firm, it was stated that during the second quarter, sales across eight major cities (Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkatta, MMR, NCR, and Pune) in India improved by 17% to 67.9 million sq ft from 57.8 million sq ft in Q2 2014-15. All top metropolitan cities cumulatively clocked highest sales in the cost range of Rs 50 lakh – Rs 1 crore, with the sales of 22.4 million sq ft (33%), followed by cost range of Rs 25 lakh – Rs 50 lakh.
For the common man, the desire to own a luxury house in India will soon turn into reality with the Narendra Modi-led NDA government taking complete charge. Issues such as delayed construction projects, affordability of real estate, delays due to litigations surrounding housing projects, etc. impacted developers as well as consumers. Fortunately, the new government promises to promote affordable housing aggressively so that every individual can fulfil their wish to raise their standard of living.
Corporate Comm India(CCI Newswire)
