A country’s economic performance has direct repercussions on how its real estate market behaves. This is especially true for the residential property segment. More prosperity resonates higher financial confidence among home buyers, and this leads to a greater demand for homes. However, over the last two years, India has been battling various economic issues such as rising fiscal deficit, a falling rupee and increasing food inflation which have adversely hit the performance of the real estate sector of the country.
We have already seen overall sales of residential and commercial real estate in India dwindling across major cities. While the residential market did show some signs of recovery in 2012 and H1 2013, there was a sudden drop in new launches and absorption from the second half of 2013 onwards. Factors like rising interest rates by banks, high inflation and the weak rupee, among others, contributed towards building a negative sentiment among home buyers resulting in a substantial drop in investor interest.
All hopes were riding on the General Elections that did make way for a stable government which is expected to do better in reviving the real estate sector as a whole. The incentives announced for the housing sector in the Union Budget and all the subsequent decisions taken by the new government seems to be reflecting their intention towards getting the economy back on the growth path. Sentiments of homebuyers too, seem to have changed for the better as the gap between demand and supply has been narrowing gradually over the last year, and this trend is expected to continue in the next six months on the back of a strong recovery in sales volume. The office market too, has been recovering over the last two years, with vacancy levels reflecting a steady decline. The recovery has primarily been led by the gradual increase in absorption across the top six metros and is expected to rise even further by the second half of 2014.
Keeping this in view, we are happy to share a comprehensive analysis of the residential and office market performance of 6 major cities – Mumbai, Pune, NCR, Bengaluru, Hyderabad and Chennai for the first six months of 2014 through our first ever half yearly real estate analysis report – The India Real Estate Outlook.
This report will serve as an industry guide for developers, suppliers, financial institutions, consumers and everyone else tracking the sector, to help them make informed choices. Click here to read the detailed report.