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Economic Slowdown a Hindrance in Real Estate Growth
| June 23, 2009 |  (3 votes, average: 5 out of 5) Loading ... |
A home is the ultimate security that every person wants. Just a year earlier ago prices of house were at an all-time high but soon economic slowdown forced the price to come down. So has real estate finally become affordable and are people buying houses? An own house is what many people dream and plan for, from the moment they enter their first job, earn their first pay cheque or find a life partner. The last eight months though have put breaks to many such dreams. The real estate sector in India has undergone a massive change following the crash in the stock market and the financial slowdown
It all started in June 2008 when the real estate market crashed. The BSE Realty Index became the year’s worst performer, shedding half of the peak it hit in January. India’s largest property firm DLF lost 54 per cent of its stock value. Unitech shed 64 per cent, Parsvnath and Omaxe lost 68 per cent each. The biggest loser in all this was the consumer and people who had invested their hard earned money in the realty sector. Situation become worse following pay cuts and job losses which stopped prospective buyers from investing in new homes.
Developers, desperate to reignite the sales, cut prices by as much as 40 per cent. There were discounts too like free air conditioners and even cars. With successive stimulus packages, the government has been working to spur realty sector - from loan incentives to the tune of Rs 20 lakh to duty cuts in the iron, steel and cement sectors. But despite all the fire fighting measures taken by the industry and the government, the demand in real estate sector has not yet picked up.
In fact one of the big developers said that, while they had clocked sales of Rs 90 crore last year, this year that figure is only Rs 30 crore. Many people are clearly shying away from putting money in real estate projects. It remains to be seen what more the industry and the government can offer buyers to re-ignite the Indian housing market.
News Published Under: Real Estate India, Real Estate Developers |
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