With the customers turning intelligent and investing in properties which are ready-to-move in and almost complete, the demand may in the sector may increase along with consumer-friendly government move.
Home buyers to return to real estate market as there are bunch of things which are indicating a healthy revival.
Does it make sense to buy a house when everyone is talking about real estate slowdown? A definitive yes if you go by Sunil Mishra, Chief Business Officer, PropTiger who says “Real estate sector, if not rocking, is reviving.”
“It is definite yes and is the best time to invest in real estate as prices have fallen by almost 10 per cent in real terms each in last two years, which is making it more affordable and real for home buyers,” Mishra said while talking to FeMoney on the real estate outlook.
Going by PropTiger’s first April-June quarter report, there has been 33 per cent fall in FY14-15 in terms of sales and launches and another 33 per cent decline in FY15-16 across top 9 cities, which include Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. Mishra believes that though sales have been almost flat at 50,000-55,000 units, the silver lining is the trend will continue and there will be no further decline.
According to PropTiger’s ‘Realty Decoded’ report,” Residential sales increased by 8 per cent in Q1 FY17 as compared with a decline of 3 per cent in Q4 FY16.” Mishra said that he is not expecting any further fall in sales this year, which is indeed a good news and the coming quarters is likely to see rise in sales and investor sentiment returning to market.
What makes him believe in the sector’s revival so much and home buyers return? Mishra said that there are bunch of things which are indicating a healthy revival like layers of governments move in terms of budget announcements for tax-rebates for first time home buyers (1st time home buyers will get additional deduction of Rs 50,000 on interest for loan upto Rs 35 lakh), Real Estate ( Regulation and Development ) Act (RERA), increasing affluence, 7th pay commission that is putting money in the hands of home buyers, falling prices and government’s move on affordable homes.
On the recent cases where Supreme Court came down heavily on developers like Unitech and Parsvantah for delaying projects, Mishra said that it will definitely affect the investor sentiment positively as they know they have a court which is on their side when it comes to errant developers. He add,”Most of the bad news are of the past and most of the good news will now come in future.”
Among the real issues that real estate sector has been facing besides liquidity crunch are fall in consumer demand and lack of consumer confidence in developers capability. With the customers turning intelligent and investing in properties which are ready-to-move in and almost complete, the demand may in the sector may increase along with consumer-friendly government move.