Realty sector bounces back

With the unmistakable signs of recovery now visible across industries, the Indian real estate sector too is showing signs of revival towards a slow but steady growth. Was the skepticism to buy a new home actually a result of the slowdown or was it just panic created by it. How is the real estate market reacting to the recovering economy?

According to a national survey conducted by makaan.com in leading metros and Tier II cities, the period between September ‘08 and May ‘09 have been extremely challenging for the Indian realty sector. The sector witnessed a serious meltdown, which affected every constituent of it, including builders and property seekers. While builders were unable to raise capital for their projects, property seekers were deferring purchases owing to job uncertainty and doubts about future earning prospects. 

Over the last three months (June ‘09 onwards), the scenario has taken a positive turn and the sentiments in the property market are showing initial signs of revival. An overwhelming 79 per cent of national respondents feel that the sector has revived in the last three months.

Recovery – city wise

Respondents across cities believe that the Indian property market is on its way to recovery. This confirms the fact that property seekers who were earlier shying away from making a property purchase are now feeling more confident of making a long term and high value investment. The scenario is echoed in both metro and non metro cities, as a majority of respondents agree that the property market has improved both in case of sentiments and transactions; although respondents from Bangalore and Chennai seemed less optimistic about this recovery.  

Accordingly, affordable housing has emerged as the need of the hour
Realtors across the country are experiencing a higher percentage of demand in the Rs 40-lakh segment. 

As many as 66 per cent of respondents confirm that majority of home buyers today want to buy houses in this segment.

Also, 26 per cent of the respondents have received enquiries for houses within Rs 40 lakh to 75 lakh segment.

Luxury housing segment continues to have scarce demand; only eight per cent feel that there is a demand in this category.

The survey also reveals that builders are either restructuring their existing schemes or are introducing more projects in the affordable segment.  

Respondents in Delhi, Mumbai, Bangalore and Chennai feel that maximum demand for property is in under Rs 40 lakh segment. However, there also exists a sizeable demand for the mid-segment (Rs 40 lakh – Rs 75 lakh). The luxury segment (under Rs 75 lakh) continues to have fewer takers.