Sales drop, but prices remain stable in Real Estate Sector

 

Bhiwadi - 18th Aug 2015

It’s going to be long wait for those waiting for the prices to drop further in a slowdown plagued market. According to market trends revealed by different realty consultants and portals the prices in major markets are likely to stay stable over the next few months in spite of the fall in sale volumes. Sales in the real estate sector dropped by 18 percent over the last quarter, but the prices are likely to remain stable, says the Quarterly Report released by PropTiger.com, leading online real estate advisory firm funded by Newscorp. The report provides an analysis and review of real estate data collected from the top nine Indian cities of Mumbai (includes Navi Mumbai & Thane), Pune, Noida (includes Greater Noida & Yamuna Expressway), Gurgaon (includes Bhiwadi, Dharuhera & Sohna), Bangalore, Chennai, Hyderabad, Kolkata and Ahmedabad.

Despite the drop in sales, the quarter witnessed key funding transactions in the sector. Warburg Pincus invested Rs 1800 crore in Piramal Realty. Lodha Developers raised Rs 542 crore by selling non-convertible debentures to Kotak Realty Fund. Many other similar transactions have taken place in this quarter, holding the promise of growth. Forecasting the outlook for the second quarter, the report says that the new launches will be slow, especially in Bangalore, Chennai and Hyderabad owing to the Ashadh month observed from July 15-August 15.

Dhruv Agarwala, co-founder and CEO of PropTiger.com, said, “The drop in sales has been primarily due to drop in new launches. The launches might pick up in October once the festive season begins. Further cuts in home loan rates might also help in the reviving sales in the real estate market”.

The report shows that Mumbai, Bangalore and Noida account for the largest unsold inventory, making up to 60 per cent of the total unsold inventory across cities. Out of this, Ahmedabad has the largest (15 per cent) ready-to-move-in unsold inventory.

The review has come in a financial year when there have been major policy developments in the real estate sector. The government is making progress with the Real Estate (Regulation and Development) Bill and Rental Housing Policy. In the same quarter, the Reserve Bank of India also cut the repo rate by 0.25 per cent. Sales in the affordable segment (less than 50 lakhs) reduced to 52% in the quarter form 55% in the last quarter. Meanwhile, 52% of unsold inventory is in the affordable category

 

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