Affordable housing sale to experience a rise of 4% by the last quarter of 2019

affordable-housing-sale-to-experience-a-rise-of-4-by-the-last-quarter-of-2019

The real estate sector is experiencing a decrease in demand due to liquidity crunch but according to property consultants Anarock the housing sales are estimated to rise by 4 percent across seven major cities. The economic slowdown has definitely decreased the investment appetite and the global slowdown has amplified it even further.

 

In its yearly round-up for the real estate sector, Anarock said that collectively, all four quarters of 2019 are likely to see housing sales of 2,58,410 units (assuming 56,200 units in Q4 2019) as against 2,48,300 units sold in entire 2018. Since the GDP has slumped to 26 quarters low, the third quarter of this year has seen a decrease in demand. The low GDP implies an increase in interest rates and making it difficult to borrow money. In turn, it affects the disposable income of the consumer which decreases consumer spending. This decreases the demand for the houses.

 

Hardeep Singh Puri, Independent Minister-in-charge, Ministry of Housing and Urban Affairs while commenting on the current housing sector scenario said, “The real estate sector’s performance – a reliable barometer of India’s overall economic health – painfully reflected the macro-economic state of affairs. The liquidity crisis did not relent and dented any ‘real’ growth during the year. Multiple developers fell off the grid while others still struggle to stay viable. However, strong players with healthy balance sheets – in many cases diversified beyond real estate – sailed through 2019 and recorded decent housing sales and revenue growth.”

 

With the recent creation of Alternate investment fund of 25,000 crores by the government, it’s the only hope for developers for the projects that have been stuck in the construction phase and facilitate affordable housing. The government has been trying to intervene in increasing affordable housing by giving tax deductions to first time home buyers for home loans below 45 lakhs.

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