The real estate market was not able to fully harness the benefits of market recovery, according to a top executive of global consultancy company Jones Lang Lasalle.
While the Indian real estate market is definitely in recovery mode again, it is evident that the festive season was not able to harness the market recovery. He further stated that the current market recovery will become visible over the next 12 months.
This is because the events that have catalysed the recovery such as the new government at the Centre, its pro-business policies, the encouraging Union Budget and the provisions it has announced favouring real estate, will need more time to bring their benefits to bear on the market, according to Anuj Puri, Chairman and Country Head, JLL India.
With the RBI holding on to current interest rates in favour of safeguarding against further inflationary trends, it will take several more months for the market to get into convincing forward momentum again, so the festive season did not bring the kind of momentum that was hoped for.
According to Puri, while demand exists, it is still held in abeyance due to various economic factors, including the natural lag between the announcement and implementation of Government policy catalysts.
Reduced pricing
Reduced pricing could potentially induce some further sales momentum in certain pockets, but it is not likely to happen as developers are not keen on signalling a correction, especially when demand is waiting in the wings. New projects are in any case being announced at lower rates.
Prior to the general elections, developers had launched many projects to gain a competitive advantage, and in anticipation of a recovery in market conditions after the polls.
However, the launches did not really pick up post elections, as residential property buyers continued to remain cautious. This is actually positive, because in a healthy market environment, supply needs to take its cues from on-ground demand.
Sales during this festive season have remained uninspiring despite attractive pricing schemes and discounts that developers have been offering to attract buyers. He, however, felt that the current scenario is no way indicative of what lies ahead for the real estate market, for which the outlook remains very much positive.