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Huge dip in realty sector, report
Posted on: 30/Jan/2016 3:44:50 PM
There is a five-year low in demand and supply in real estate industry as there is not enough interest shown by homebuyers and developers, according to a report rolled out by international consultant Knight Frank on Thursday. Following the recent deluge, there is a significant dip in stakeholder confidence which further worsened infrastructure breakdown. The second half of last year saw 13 percent drop in project launch and 9 percent in sales. Earlier, there was 1.5 percent growth in the industry annually.
During 2015, the price hike in realty sector was 10 year low. Buyers did not show interest in buying apartments during initial stages of construction, says Kanchana Krishnan, the director of Knight Frank.
Due to their fear of non-completion of the project, customers wait until 50 to 55 percent of the work gets complete and then decide to book.
The only aspect of relaxation for these developers was the dwindling unsold inventory. Since 2013, there is a continual trend down from 43,800 units to 36,350 units.
Reporters say areas on and off Old Mahabalipuram Road are among the areas badly hit by floods. However, residents in western suburbs including Thiruverkadu, Valasaravakkam and Mount Poonamallee High Road made the most out of these situations especially during the five months before floods while those from the southern suburbs were reluctant towards buying apartments. In those western regions, apartments priced Rs 25 to 50 lakh were mostly sold. There has been 36 percent dip in premium segment year-on-year.
At the same time, there is a good pick up with office space leasing and saw growth for the third successive year. In 2014, over 3.7 million sq ft of office space were leased out. This surged to 5.1 million sq ft in 2015, accounting to 37 percent increase.
There is not much interest shown by the developers in setting up new projects with commercial segment.
