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Demand for houses may turn corner after five-year dip
MUMBAI: Residential real estate demand in India’s top cities may have finally turned the corner after declining for the last five years.
MUMBAI: Residential real estate demand in India’s top cities may have finally turned the corner after declining for the last five years.
According to real estate portal PropTiger, residential real estate sales rose 8% year-on-year during the April-June period compared with 3% decline in the January-March period of 2016.
Sales across nine key Indian cities — Mumbai, Pune, Noida, Gurgaon, Bengaluru, Chennai, Hyderabad,Kolkata and Ahmedabad—rose to 55,550 units in first quarter of this fiscal from 51,500 units in fourth quarter of 2015-16, PropTiger said.
Growth in demand for houses was in the negative territory from 2011 to 2015, according to a Crisil report released late last year. The ratings company had expected demand growth to turn positive in 2016.
Analysts say the improved activity is driven by softening interest rates, limited or no increase in house prices and controlled supply by developers. Experts say the seventh pay commission payouts should also boost demand .
“The first quarter of 2016-17 has started on a positive note for residential markets. Fence-sitting end users are beginning to enter the market. The worst seems to be behind us,” said Dhruv Agarwala, chief executive officer, PropTiger.
The optimism is echoed by developers too. “Prices of houses have not gone up much in the last four years (in markets such as Mumbai) and consumers have realised prices are unlikely to come down,” said Vikas Oberoi, CMD of Oberoi Realty.
Real estate consultancy Knight Frank too pointed out that residential sales across top eight cities in the first six months of 2016 rose 7% to 135,015 units compared to the same period in 2015.
