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Indian Real Estate Market Shows Signes of Revival

Posted by Alok Upadhayay on July 31, 2017
| 0

Indian Real Estat Market, with a 51% rise in the number of property seekers over the past 12 months across the nation, shows signs of revival. The data is based on searches generated on magicbricks.com in past 12 months.

These are really interesting times for the real estate industry. Over the past year, Indian Real Estate Market has seen the roll out of a slew of policy reforms in the form of demonetization, GST, RERA, PMAY, among others. These are high impact initiatives, with the potential to make structural–and permanent-changes to the real estate industry.

Indian Real Estate Market Shows Signs of Revival soon

Source : TOI

While the narrative in the past several months has focused on these reforms, what has probably gone unnoticed is the changing dynamics of consumer demand and the emergence of green shoots here. Put in perspective, prices in the real estate over the past two years have been flattish and transactions have seen a steep fall, but recent data from Magicbricks suggests that consumer demand could be showing signs of revival.

Data from Magic Bricks suggest that there’s a 51% rise in the number of property seekers over the past 12 months, with the number of active property seekers going up from 3.4 lakh in July 2016 to 5.3 lakh in June 2017.

Interestingly, it turns out that the numbers of new property seekers entering the market have swelled by 25%–from 2 lakh to 2.5 lakh in this period. The number of older property seekers has doubled from 1.4 lakh to 2.8 lakh. [An older property seeker is defined as someone who has been on the market for over a month.] It is indeed a sign of green shoots emerging in the number of new property seekers entering the market is going up in a significant manner. We believe that the reason for this steep jump in older seekers is probably because consumers are taking longer to decide on buying a home and, therefore, they are in the market for several months longer.

Indian Real Estate Market Shows Signs of Revival soon

Source: TOI

Indian Real Estate Market Shows Signs of Revival soon

Source : TOI

An older property seeker is defined as someone who has been on the market for over a month.It is indeed a sign of green shoots emerging in the number of new property seekers entering the market is going up in a significant manner. We believe that the reason for this steep jump in older seekers is probably because consumers are taking longer to decide on buying a home and, therefore, they are in the market for several months longer.

It is indeed a sign of green shoots emerging in the number of new property seekers entering the market is going up in a significant manner. It can be inferred that, the reason for this steep jump in older seekers is probably because consumers are taking longer to decide on buying a home and, therefore, they are in the market for several months longer.

 

With deeper analysis, it comes to light that, the highest demand has been in the Rs 80 lakh and under budget segment. Interestingly, demand in this segment has also grown by 73% over the last year, followed by the mid-market and luxury segments, whose growth has been lower at 28% and 13% respectively.

If one looks at the data across cities, it turns out that the growth in property seekers is not uniform across all cities. Some cities like Hyderabad, Chennai, Kolkata, and Mumbai are registering a relatively better uptick in demand.

Steady completion of current projects; introduction of consumer protection laws like the real estate act that mandates a RERA for every state and UT; continuous softening of home loan rates; the government’s thrust on affordable housing through PMAY and CLSS schemes, and the current pace of urbanization are some of the key drivers that are drawing more people towards home buying. The prospect of owning a home continues to draw interest from the Indian consumer. Clearly, the number of transactions on the ground is not anywhere close to these numbers yet, but the increase in the number of property seekers is an encouraging sign for the industry.

How well the industry is able to convert this increased demand into transactions, especially with the festival season drawing close, will determine whether these green shoots actually translate into a more sustained revival.

Source: TOI

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