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Signs of realty revival ahead of festive season

Liquidity triggered by 7th Pay Panel, muted property prices in most parts of country could help put sector back on track

Signs of realty revival ahead of festive season

Karan Choudhury New Delhi
After a series of lacklustre festive seasons, the real estate sector is hoping for a much needed bounce-back in the residential market.

Liquidity triggered by the Seventh Pay Commission and muted property prices in most parts of the country could help put the sector back on track.

“Sales have improved by about 10-12 per cent overall, with the readings differing across cities. The increased demand is primarily for well-located properties by good developers, in projects which are either complete or within 6-8 months of completion,”    said Santosh Kumar, CEO, operations, and international director, JLL India.

“Given that prices have corrected in many cities and developers are being proactive with their offers, this year's festive season will present a more vibrant picture in residential sales,” he added.
 
According to Kumar, an uptick of 12-15 per cent in sales is expected over the period.

The slide in house sales started after 2010, pointed out analysts. But they said the trend in the last six months was encouraging.

“This can be attributed to a number of reasons like the Real Estate Regulation Bill, relaxation for REITs, lower interest rates, the GST and a good monsoon. These factors coupled with the festive season and the economy doing well have had a positive impact,” said Samantak Das, chief economist and national director, Research, Knight Frank (India).

He added prices were expected to remain largely muted for the remaining part of 2016.

“On the whole, developers will try to increase volumes, and festive offers will play a key role in pursuing these endeavours,” Das said.

“We are on the verge of delivering 12,000 apartments by the end of this year. These projects were delayed for many reasons, but now we will offer possession. Enquiries are on the rise,” said RK Arora, chairman, Supertech, a property developer.  

The company is taking bookings for 200 apartments a month and plans to sell around 1,500 by March. The company hopes to see a 15 per cent rise in bookings over last year.

According to experts, the most important catalyst has been housing price reductions in almost all cities.

“The second reason is developers’ increased willingness to negotiate with serious buyers. A number of projects in good locations are ready for possession. Infrastructure deployment has been on a faster pace, making many locations more viable,” Kumar added.

ON GROWTH PATH
  • From the peak of 2010, there has been a continuous decline in sales of residential properties between 2010 and 2015. New launches went down by 50 per cent and sales declined by 21 per cent
     
  • On an average, the sale during festive season this year may see a growth of five-seven per cent
     
  • Increase in demand is being witnessed in well-located properties by good developers. These are the projects which are either complete or within 6-8 months of completion

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First Published: Aug 27 2016 | 10:24 PM IST

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