« | Home | »

India Ratings predicts weak demand for residential sector in FY21

Comments Off on India Ratings predicts weak demand for residential sector in FY21   |   March 24, 2020    07:49pm   |Contributed by Indian Realty News

According to a study by India Ratings, lack of credit availability and ongoing economic slowdown in India due to the coronavirus pandemic could lead to the residential sector witnessing weak demand in the fiscal year 2020-21. 

Residential demand could remain muted in the next financial year, 2020-21 due to the increasing risks to India’s growth in case the economic impact of coronavirus continues beyond the first quarter.  

Moreover, the housing sector faces a liquidity crunch and refinancing challenges due to increasing uncertainty over the availability of credit in the market, coupled with poor demand. This is in the backdrop of the recent meltdown in the financial market and rising risk aversion among investors.

The top metro cities of India witnessed a drop in total residential sales by four per cent to 204 million sq ft in the first nine months of FY20, from a total sales of 279 million sq ft in FY19.

After growing steadily over FY17 to FY19, the affordable houses priced below Rs 50 lakh registered a decline in the first nine months of FY20. Meanwhile, Grade A developers registered a spike in sales due to consolidation in the market. Nevertheless, this growth rate can come under threat if the economic impact of coronavirus continues beyond the current quarter.

Geographically, the National Capital Region (NCR) saw the highest decline, while Hyderabad registered a stable growth rate in regards to area sold. Investors’ demand has been negatively impacted due to the residential sector under-performing as an asset class. 

News Published Under:   Property Prices, Real Estate India, Real Estate Trends | Comments Off on India Ratings predicts weak demand for residential sector in FY21