Affordable homes help to light up dark Diwali for real estate sector   

While luxury sales have taken a hit, builders in some parts of the country are banking on affordable and premium homes contributing to increased sales.

Published: 09th November 2018 06:47 AM  |   Last Updated: 09th November 2018 06:47 AM   |  A+A-

By Express News Service

BHUBANESWAR: The festive season has failed to enthuse the realty sector on the back of a liquidity squeeze in the non-banking finance companies. While luxury sales have taken a hit, builders in some parts of the country are banking on affordable and premium homes contributing to increased sales.

“The ongoing NBFC crisis has, for all intents and purposes, hijacked Indian real estate’s growth story over the short to mid-term and the ongoing crisis would play spoilsport for developers this festive season,” said Anuj Puri, chairman, ANAROCK Property Consultants, adding that there was no significant change noted in the number of inquiries seen during this festive season so far.

Puri added that it was a matter of time before they saw how the crisis impacted private equity (PE) funds flowing into the sector. “It can be expected that home loan interest rates will see a slight rise in the near future, primarily brought on by the dearth of funds”, he said.

According to a Kolkata-based realtor, builders have queued up to register projects under the West Bengal Housing Industry Regulations Act (WBHIRA). Of the 3,000-odd projects in the city and suburbs, around 80 had applied for registration till date “Sales started dipping in August as lenders have become selective and are willing to fund projects that are clean and RERA-registered. Sales were down to an all-time low, with numbers in September even lower than 2008-09 level when sales had crashed following the US mortgage crisis.”

However, a quarterly report by PropTiger.com shows home sales in nine major cities increased 24 per cent in the July-September quarter of the current financial year when compared to the same quarter the previous fiscal, driven by affordable home segment. The nine cities in the analysis include Ahmedabad, Bengaluru, Chennai and Gurgaon (including Bhiwadi, Dharuhera and Sohna).

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