India’s realty sector hopes the New Year will help mark an end to multi-year slowdown in the property sector when the new real estate law will see the light of day in 2016 and bring in the much-needed efficiency, transparency and accountability into this sector.
Market analysts have said the housing sales had remained flat in 2015 despite 15-20 per cent fall in prices and multiple interest rate cuts with real estate firms sitting on old inventories.
The proposed law, which was recently cleared by the Cabinet and would now go to Parliament for approval, can boost customer’s confidence, which has dented because of delays of up to 5 years in delivery of projects.
Housing sales, which stood at 175,000 units during 2014 in the primary markets of seven major cities, are likely to be around same level in 2015, property consultant JLL said, adding that sales were marginally down to 116,000 units in the first nine months of 2015.
Launches of new homes were drastically down in 2015 with over 600,000 housing units remaining unsold in eight big cities, according to Knight Frank India.
Developers tried their best to boost sales by offering apartments, on both offline and online platforms, at discount laced with freebies and easier payment plans, but potential buyers chose to wait for further correction in housing prices.
However, realtors are confident of a turnaround in 2016, banking on the RBI’s move to reduce key interest rate by 125 basis points and the government’s steps like easing of FDI rules and launch of Housing for All and Smart Cities schemes that could provide new growth opportunity for the sector.
Unlike housing, the office and retail segments performed better and reported higher leasing numbers against 2014.