The auspicious season of Dussehra-Diwali in India seems to have turned out to be not-so-favourable for the domestic real estate sector this year, with the early estimates of sales in the current festival season at a growth level estimated to be half the previous year.
Against the usual growth figures of 20 – 25 percent registers by residential real estate segment in the previous years, this festival season (Q4, 2018) is expected to see the sales growth in the residential units across the country to be down to 10 -12 percent, according to projections made by leading real estate consultant ANAROCK Properties Consultant.
The growth projection is made based on ANAROCK’s quick estimates on the Dussehra-Diwali period sales across major Indian cities.
The October-December quarter, billed as the ‘festival quarter’, beginning with Dussehra-Diwali and ending with Christmas, historically clocks the maximum sales growth numbers for the real estate industry.
“Besides the lingering on effects of demonetisation and GST (goods and services tax) impact on the industry, the current liquidity crunch in the Indian financial market also seemed to have affected the customer sentiment this festival season, adversely impacting residential buying,” Anuj Puri, chairman, ANAROCK Property Consultants, told Arabian Business.
ANAROCK, which also has operations in Dubai, is among the leading players who help NRIs (non-resident Indians) and other investors based out of UAE and other Middle East countries to invest in the Indian real sector – both residential and commercial.
Even the house purchase by NRIs in the current festival season so far has been muted, according to industry sources. This is despite the recent trend of a spike in investments by NRIs, especially from the Middle East, in the Indian residential real estate sector in the wake of sliding rupee exchange value and price correction in the sector, which together presented attractive investment opportunities for them.
The projections of a subdued growth trend in the current quarter will come as a major setback for the Indian residential real estate sector, which was expecting a better performance this festive season, riding on a sustained growth trend in consecutive quarters of this year.
Housing sales in Q3 2018 posted an increase by 9 percent compared to that of the preceding quarter (April-June 2018). The housing sales across the top 7 Indian cities in the July-September 2018 quarter were, however, up by 15 percent compared to the corresponding quarter of 2017.
“If we go by these numbers and look at the current scenario, we can expect sales to go up by 9-12 percent in Q4 2018 as against the preceding quarter. However, the ongoing liquidity crisis in Indian real estate could, to some extent, play spoilsport for developers this festive season,” another senior executive at ANAROCK Property Consultants said.
While sales numbers have been increasing q-o-q, there is no significant change noted in the number of inquiries seen during this festive season so far, the executive said.
As per the ANAROCK data, as many as 1,78,470 units have been sold in the first three quarters of 2018 across the top 7 cities.
As per trends, maximum absorption in the first three quarters of 2018 has happened in the affordable and mid segment residential segment - up to Rs 80 lakh ($1.09 lakh) across the top 7 cities, comprising more than 75 percent of the total housing sales. The remaining consisted of luxury and ultra-luxury properties priced above Rs. 80 lakh.For all the latest real estate news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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