Real estate sees a 40% drop in housing sales in the last 5 years, says ANAROCK report
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Market speculation has played havoc with the real estate sector, according to the ANAROCK report. The fallout of speculative activity in the previous years is still being felt.
Residential market trends have dropped by 40%, indicating that 2013-2014 was the last year when things looked vibrant for the sector.
The data compiled by the consultancy firm ANAROCK, shows that housing sales have dropped significantly in the 2015-2016 period. Only 2.7 lakh units, on an average, were sold across top 7 cities of India during the period. This recorded a drop of 17% from the average sales of 2013-14 period.
In 2013-2014, an average of 3.3 lakh units were sold annually. Thereafter, with too many project launches facing off with decreasing demand, unsold inventory began piling up across the top 7 cities of India.
The real estate sector was hit after the announcement of demonetisation on November 8, 2016. Right after demonetisation, the Modi government announced the rollout of the new tax regime in July 2017, the Goods and Services Tax (GST).
In May, the real-estate regulator- RERA Act was brought to force. The Act is in the interest of the home buyers and it became a mandate for the investors and real estate players to register under the Act.
Post the announcements, the real estate sector was battered with all three norms which shook up the sector. The following year, only around 2 lakh units were sold across the top 7 cities of India.
The country took a while to cope with the new reform. During that period, larger cities such as NCR and MMR recorded a massive drop of 68% and 27% respectively in average sales. This is because the sector was driven by investor activity. Other cities inclined towards investment in real estate, Bengaluru and Chennai, also saw average sales decline by 17% and 45% respectively.
Market speculation has played havoc with the real estate sector, according to the ANAROCK report. The fallout of speculative activity in the previous years is still being felt.
The reduced buyer confidence due to project delays and diversion of capital also contributed significantly to the decline in housing sales in some parts of the country. The report points that RERA is gradually reversing this aspect. However, most cities will continue bearing the brunt of the speculative activity even in the near future.
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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow
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