Indexes point out a slump in the real estate stake holder’s sentiments

The overall situation of the real estate industry was in a state of lull in the last three years. The unsold stock was gradually piling up and the industry was gasping for liquidity and more sales. In cities like Gurgaon, Noida and Hyderabad the developers started to lower the price levels by tailor making the high priced High Income Group apartments for the middle income group (MIG). With the swearing in of the new government a year back the country’s real estate sector started to become a bit more optimistic as they thought with the real estate friendly government promises, things can change. The first budget of the Narendra Modi government gave a few energizing promises like the REIT, the real estate regulatory bill, the RBI cuts for the interest rates, etc.

Let’s probe into the macro market situation and see what has actually happened to the buyers’ sentiments. The indexes of the global real estate consultancy firm Knight Frank along with the estimates of FICCI shows that new launches are more on the anvil and is to improve marginally as per the estimates based on January to March 2015. The report also says that the new launches in the cities like NCR, Mumbai, Bengaluru, Hyderabad, Chennai and Pune are going to have a shortfall of new launches due to the pile of the unsold stock already surmounting.

real estate stake holders

The new launches of products in the real estate sector has already come to a staggering half in the quarter of January to March 2015 but the volume of sales have been observed to have remained steady. But other surveys and indexes also hint that the new launches would witness a marginal increase in the next half of the financial year. But the estimates also say that the pricing would also remain stagnant on the backdrop of a subdued demand.

According to the report of the index of FICCI-Knight Frank the sentiments have dropped over the figures of last year as the sales volumes did not improve. The 15 percent of the surveyed respondents expect an increase in the prices which the proportion of the population expecting an increase reduced to less than about half of last years’ numbers or even the numbers of Q3, 2014. The survey says that just 33 percent of the total opinion poll believed that there is a possibility of hike in prices in the ensuing six months.

The report reflects that the market is about to witness a few new supply of office spaces during remaining period of this year. The vendors of the real estate segment opined in the opinion polls that there should be a substantial increment of new office spaces on the back drop of the latent demand sensed by the market. The optimism for rental appreciation is also high in the ensuing six months.

The sentiments for the appreciation of office space rentals have been witnessed to be the highest in the last six quarters. 85 percent of the respondents believe that the rentals have a high degree of chances of appreciation. The report clearly remarked that after the election of 2014 the stake holder’s sentiments of the real estate sector remains to be quite optimistic. The current sentiment score is being hovering around 51 and future estimates are anticipated at 64 which are quite healthy. This does not only shows a positive trend of the sentiments but also indicates a very positive undercurrent of the market sentiments. The government’s initiative like “Make in India” programme has boosted up the stake holders’ sentiments to a considerable extent.

The report points out that the North and the West experienced a dip in the levels of sentiments in the quarter Q1 2015 and the South and the Eastern Zones expect a steady revival of the real estate sentiments. Cities like Delhi and Mumbai are great drivers of real estate business in India and the figures of the last quarter points out that the recent political upheaval in Delhi and an ambiguous development plan have taken a toll on the sentiments of these cities and the respective zones.

Bangalore people can check properties many builders but Dreamz GK has projects with affordable price which make every persons wish to buy a home.

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10 thoughts on “Indexes point out a slump in the real estate stake holder’s sentiments

  1. This is not hidden that real estate market of India has a bad time continuing from last few years. Still the change in government and the new allegations by our political party, the changes in Land acquisition laws has came with a new ray of hope which can change the future scenario of Indian real estate Market. In support to it a closer survey on buyers should be done so that the actual picture will come in front and the mistakes done by the marketers can be rectify.

  2. The price of flats in apartments has get down in order to sell these unsold stocks. There is an alternative way where the government has to take some aggressive steps and cut down in tax rate or purchase those flats in order to make it available for low income buyer.

    • Well this seems it is the only option to sell these apartment. But what about those customers who already had booked some flats in those apartment and now if the builder sells the same apartment with low price than what about these old customers. Is there any plans for them as well?

    • I don’t think government will interfere in any of this business, because the price of the flats has been decided by the builder itself. Construction cost plus taxes plus their margin is flat cost and higher the margin higher the rate of flat. After this rise in unsold stocks the builders are now coming with excited offers like electronic appliance and other gift coupons for free in order to sale the remaining flats.

  3. In one hand unsold stocks of flats are filling up in Bangalore and in other hand people are still wondering for flats which they can afford easily. The prices of flats are so high that it is impossible to buy for mid income people. Where as there are people who wants to invest for rental business but buying these luxurious flats with such investment would hardly give them any return so they are also keeping themselves back. Builders need to rethink about there pricing.

  4. The real estate investors who has been actively investing in projects of Bangalore are thinking twice now a day, the only reason behind this is the unchanged rates of flats. May be the demand is constraint but in every financial year builders hike their price of flats where as people are demanding for low budget flats more than luxurious high end builders projects.

    • I think this is a perfect season for investment point of view because most of the builders are selling their projects at a reduced rate with exciting offers. If investors will buy property at this time then they can enjoy a good profit when the market starts covering up.

  5. Low and affordable houses are the reaso of this rise in unsold stocks again in few year government itself launching sceems like housing for all. People who are buying flats for their basic need they will never go for the high segmented flats, Mid income people will not think about these because they are getting flats in an avarage budget with all amenities from other builders.

    • The cost of living for people in Bangalore has changed drastically in few decades. Now the defination of basic need has been changed and it goes up a futher step towards their status maintainance. People living in luxurious flat not because they want a place to live but they want to show their status symbol for which they can spend as many as they can. The demand for this kind of apartment is still there but its limited.

  6. So now everyone is pretty aware that budgeted flats are more demanded than luxurious sophisticated flats by branded MNC builders. Builders started selling their flats with exciting offers to release their unsold stock of last year. What would be their next thinking? Now all builders will concentrate only on low budgeted flats or they move their genre to independent houses.

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