Slowing Housing Sales – Where Does The Problem Lie?

Accommodation Times News Services

By Suvishesh Valsan, AVP – Research & Real Estate Intelligence Service, JLL India

Decline in pricesSales of residential units declined significantly over the last two years, particularly in the initial periods. 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.

This trend has been witnessed across the seven leading metros, and the situation is particularly grim in markets such as Delhi-NCR, where the sales rate has declined by 10%. Despite a big fall in Pune, Hyderabad and Kolkata, the sales rates of these cities still remain in double-digits at 12-13%. Mumbai’s fall was moderate, owing to low sales rate throughout the said period.

Typically, there are five broad factors that influence real estate markets. These include the country’s GDP and employment scene, credit availability, interest rates, housing supply dynamics and consumer confidence. A look at each of these factors reveals that the formula for revival could lie within the reach of builders and policymakers.

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