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This Diwali, India’s realty sector did not shine as brightly as it did in the past. According to Assocham, the demand for real estate around the festival of lights went up 20 per cent, a fifth of the growth normally seen during Diwali.
“There has been a surge in demand of only 20 per cent on the eve of the festival compared to the normal average sale per month”, an Assocham survey has found. Builders and investors said they had been been expecting 100 per cent jump as in the past.
The resale or secondary market was also dull this festival season as the market saw participation by very few investors , said Assocham Secretary General D.S. Rawat. The property analysts have predicted that till March next year the demand for plots, houses and flats may drop by at least 15 to 20 per cent.
Inventory pile-up has happened due to lack of adequate demand, the survey has found.
Lukewarm response
The survey was carried out in Delhi-NCR, Mumbai, Bangalore, Chennai, Kolkata, Ahmedabad, Hyderabd and also Pune, Chandigarh and Dehradun. The survey involved 250 property dealers, 40 builders or developers and 20 housing finance outfits.
Assocham said that despite aggressive marketing and special festival offers, investment in property has remained lukewarm. High property prices, particularly in and around the NCR region, has been a deterrent. Developers, however, cited that higher price of land and construction material costs have been the reasons for the increase in property prices.
A majority of the developers complained about inordinate delays in getting necessary approvals from multiple regulators and authorities, resulting in cost and times overruns.
Banks “apathy” in financing real estate projects was also evident this time, the survey findings underlined. Weak investor sentiment has added to the woes of developers.
The Government must grant industry status to real estate sector and real estate projects must be classified as infrastructure and priority lending should be made available for keeping pace with the demand and supply scenario, it said.
> jayanta.mallick@thehindu.co.in
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