No green shoots of recovery for housing sector yet

An RBI survey indicated that household savings and availability of cash will continue to be at risk next year, implying fewer homes will change hands in 2019.

Bengaluru sold only 20 of every 100 houses built in 2018, Kolkata about 10 and Delhi-NCR around five. The forecast is even bleaker for 2019.

The Reserve Bank of India’s Systemic Risk Survey has indicated household savings and availability of cash will continue to be at risk next year, implying fewer homes will change hands in 2019.

With housing sales being a major indicator of economic acceleration, a large stockpile suggested that green shoots of recovery in a major sector are nowhere in sight.

Bengaluru sold a little above 20% of the homes in 2018, a tad higher than the previous year, leaving a stockpile of about 80% with builders. In Kolkata, the unsold houses were at 90% while in Delhi, the inventory piled up to 95% of homes built for sale last year.

Among eight major cities surveyed by RBI, only Hyderabad was able to sell about 60% of houses meant to be sold in 2018 with its sales growth rising by almost 100% since 2017. This was followed by Pune, which sold half of the houses in its inventory last year. Chennai, Ahmedabad and Mumbai followed, albeit with marginal growth in sales since last year.

New launches, however, were higher than their sales in Mumbai, Bengaluru, Chennai, Pune and Delhi and NCR.

RBI said that the spike in launches was driven only by government schemes implying that the private consumption demand was muted.

The risk survey that captures the perception of market participants, academicians and credit rating agencies, said equity price volatility and liquidity risk moved from medium to high-risk category.

Liked the story?

  • 0

    Happy
  • 0

    Amused
  • 0

    Sad
  • 0

    Frustrated
  • 0

    Angry

Comments:

No green shoots of recovery for housing sector yet

0 comments

Write the first review for this !