Government data suggest that India is world's fastest growing economy at seven to seven point five percent growth rate. Such should be seen also be seen in the real estate market but clearly, it is not the case. Otherwise, more families should be buying homes and there should be a visible increase in the construction industry but it is not happenng.
Instead of growth, the Indian real estate sector is showing signs of economic gloom and that is the question everyone is asking according to Catch News.
The report adds that the 8 major real estate markets include Delhi-NCR, Mumbai, Bangalore, Pune, Kolkata, Chennai, Hyderabad and Ahmedabad. It dampens the spirit of the investors to know that the unsold inventory will take about three years to be sold.
The confidence of the real estate developers have been affected and it is shown by the 40 percent fall of units launched between last year and this year.
Although the report for the second half will not be released until early next year, Knight Frank's chief economist and director, research Samantak Das says that it is not promising either.
Das adds, "We can say that 2015 was the rock bottom year for the real estate residential market. It all started in 2014 when sales started to fall and the final numbers will make 2015 worst than 2014. Clearly, there is not enough confidence among buyers to buy residential properties. We expect that 2015 sales would be 5-6% less than 2014."
An observation was made that the number of inquiries about houses have increased but they never converted into sales for lack of purchasing power.
Das continues, "People have lost faith in real estate developers. Most projects are facing delays of about 2 years or more. Consumers are very cautious about investing their money. They are investing in only those projects that are ready to move in or are 90% complete."
The next question is, how will the real estate market in India fare next year? Experts says that it would depend on reduction in prices, decline in interest rates and real growth in the economy. The first thing that must be done, however, in to increase confidence among its people to buy homes.