The number of units that are sold from both new and old projects every quarter form the sales rate, and from 14% in 1Q13 this has steadily declined to below 9% as of mid-2015, thereafter remaining stable at low levels, according to global property consultant JLL India. The report further added that the slowdown trend has been observed in seven leading metros with the situation particularly grim in markets such as Delhi-NCR, where the sales rate has declined by 10%. Despite a big fall in Pune, Hyderabad
Mumbai's fall was moderate, owing to low sales rate throughout the said period. Suvishesh Valsan, AVP – research & real estate intelligence service, JLL India lists out five broad factors that influence real estate markets, including country's GDP and employment scene, credit availability, interest rates, housing supply dynamics and consumer confidence. These factors indicate the formula for revival could lie within the reach of builders and policymakers.
GDP and employment scene: In contrast to the housing sales rate, India's GDP has been rising consistently over the last two years from 6.9% y-o-y growth in
Credit availability: RBI data on the growth in home loans as well as the growth in credit to the construction sector (including loans to public housing agencies) reveals healthy credit offtake. Home loans have grown at a 17% y-o-y average over the last two years (until May 2015) whereas bank credit given to the construction sector grew at 22% y-
Interest rates: CPI inflation has declined sharply by around 3% in the last two years and it now stands at 5% (as of May 2015), which is well within the comfort zone defined by the Reserve Bank. Consequently, the RBI has responded with three rate cuts (
Housing supply: Developers have consistently launched close to 60,000 units every quarter since 1Q13 despite the slowing demand. As a result, developers' unsold stock has mounted, particularly in NCR-Delhi, Mumbai
Consumer confidence: With
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