According to reports of various agencies such as Anarock Property Consultants' and Property consultancy Jones Lang LaSalle's (JLL) report titled "Bengaluru - Opportunities in Challenges, the condition of the real estate sector has now stabilised. The real estate sector was deeply affected by government’s policies such as demonetization, GST and RERA. Demonetization drained out the cash in circulation form the market and real estate sector is heavily dependent on cash, this led to a massive slowdown. Further implementation of GST escalated the prices and the frequent change in rules brought about an uncertainty in the market forcing potential buyers to hold their decisions on investing in a home. The norms to be complied with increased many folds due to implementation of RERA which further increased the burden on builders.
In spite of all these factors the situation in Bangalore was better than the other cities. While average home sizes in most large cities decreased by 12-21% last year, in Bengaluru, the reduction was a mere 2%. The unsold inventories was about 25% as of March 2017, but the pace picked up in later months and now the unsold inventories stands at 16%.
The Confederation of Real Estate Developers Association of India (CREDAI), Bengaluru chapter, has termed the present period as the "stabilisation period." According to them, buyers have not exited the market and are still willing to purchase. Demonetization slowed down the payment cycles but the customer base remains the same and now they are ready to process the payments.
Courtesy/By: Saurav Tibrewal
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05 Feb 2018
