Real estate to take a dip this festive season

The ongoing Covid-19 virus mayhem and concerns over the global economy are likely to curtail a number of residential project launches across the country during the upcoming festive season of Gudi Padwa, Ugadi and Akshaya Tritiya, which usually sees several new launches. Developers are keen to focus on executing their ongoing projects rather than adding new inventory as they continue to grapple with liquidity challenges. The previous two quarters have been relatively better in terms of sales velocity. However, most developers are looking to utilize funds received from customers to execute the project and service debt as against spending on new launches. “The Indian real estate market may witness fewer launches amid many economic risks curbing credit supply in an already liquidity choked economy,” said Niranjan Hiranandani - national president of industry body Assocham and the National Real Estate Development Council (Naredco). Home sales improved over the last two quarters on higher confidence levels among homebuyers and realty developers. The top 35 property markets, including tier I and II cities, recorded 3% on-year and 5% sequential growth in sales, with 27 cities witnessing increased sales in the quarter ended December. New launches, an indicator of confidence among builders to start marketing their projects, rose 38% from a year ago. The current scenario may, however, pose challenges.