ALSO READReality check: Disasters in Uttarakhand create residential realty demand in plains High prices, interest rates make this a dull Diwali for realtors Rise in Delhi circle rate dampens festive spirit Loan for residential plot comes with conditions Strong demand for residential property from IT professionals
Aman Verma (name changed) is looking for a decent home in the National Capital Region (NCR) for the past few months but is nowhere close to finding a property that suits his budget. High home loan interest rates are another hurdle. This explains the Indian realty market: Enquiries have gone up substantially in the past six months but home sales have hardly seen an uptake.
According to experts, a revival in the sector is still 12-18 months away. Developers are expecting major announcements in the coming Budget, which will push up the pent demand in the sector, especially in the affordable segment..
Read our full coverage on Union Budget
In 2014, the residential property market across top cities, including Delhi NCR, Mumbai, Pune, Bengaluru, Chennai, saw a 28 per cent decline in new launches and 17 per cent in sales volume compared to 2013, according to a report by real estate consultancy firm Knight Frank.
A total of 234,930 units were sold in 2014, compared to 284,550 units in 2013. Similarly, 268,950 units were launched in 2014, against 372,160 units in 2013.
According to CBRE South Asia chairman and managing director Anshuman Magazine, there is no major uptake in sales. "Sales at the right location with right pricing are still happening. But overall, there has been no improvement. The market is not picking up. Moreover, the turnaround period is large in the realty sector, unlike share markets."
He added the government should announce incentives to stimulate demand, including lowering of interest rates or a low cut-off for affordable housing in terms of ticket size or a low down-payment required for purchasing a house.
"It is worse than the post-global financial crisis. Sales are not happening. So, this is a good opportunity to buy. We are at the bottom; it can only go up from here," said Magazine.
Ashutosh Limaye, head of research and Real Estate Intelligence Service at JLL India, also said demand had not picked up in the manner expected after increased enquiries and inspection visits.
"There are a few takers if developers come out with limited period offers and other deals. But there is only a minimal increase in sales in the overall sector," he said, adding the sector was keenly awaiting announcements in the Budget to push the sector back to revival mode.
Developers expect big announcements in the Budget that might push up demand in the sector. According to Getamber Anand, president-elect, Confederation of Real Estate Developers' Associations of India, the government should provide some fiscal incentives to developers for affordable housing.