Real Estate: 7 charts shows festive season has no impact on demand; Q4FY16 was at five-year low
This festive season could see an increase in demand because developers are now offering lot of freebies and discounts to clear their earlier stock as well as selectively launching new projects.
While, festive season is right around the corner and every sector is expecting to see a pick up unlike last year where "demonetisation" announcement had disrupted the demand, this year too economic slowdown can come as a hurdle.
One such sector which has seen a lot of ups and downs is Real Estate sector. However, with Real Estate Regulation and Development Act (RERA Act) coming into effect, the realty companies are hopeful.
"This year, we are now seeing developers after tackling RERA and ensuring compliance are now launching new projects. There is definitely solid demand for ready-to-move-in properties", PropEquity report said.
As per the report, another reason on why this festive season could see an increase in demand is that developers are now offering lot of freebies and discounts to clear their earlier stock as well as selectively launching new projects. There is lot of unsold inventory in the market which is nearing completion.
But, on the other side, if you look at the data based on the cities, till last quarter of FY16, the new launches and total absorptions are at five years low. The impact of festive season is generally seen in the last quarter of the financial year.
According to PropEquity data, here's a look at seven charts which will show you slowdown in this sector:
If you look at the data, in all the cities, both new launches and total absorption has been declining from its previous financial year. Which means, in all the above mentioned cities, the real estate sector is facing a downfall from past five years in a row.
Moreover, except Hyderabad and Pune, in all the other five cities, in Q4FY16, there is a rise in absorption as against the new launches. While in case of Hyderabad and Pune, the total absorption has dropped as compared to new launches.