It may be too soon to gauge the impact of the recent downward revision of the policy interest rate by the Reserve Bank of India (RBI), but an Assocham survey says it has not helped the troubled housing sector. Even the onset of the festive season has not come to the aid of this sector, and the picture is not rosy for the next six months at least.
The survey found that demand for new projects is scarce and new launches have come to a trickle, suggesting lack of consumer confidence and cash crunch among builders. Assocham surveyed 250 builders across the five big metros of Delhi, Mumbai, Chennai, Kolkota and Bengaluru, and other big cities like Hyderabad, Ahmedabad, Pune, Chandigarh and Dehradun.
The drop in new launches was to the extent of 60 per cent in the Delhi-NCR and Mumbai areas, but was lesser in Chennai. In Bengaluru, the Cauvery water dispute has washed away the enthusiasm and the demolition drive brought the sector to a stand still.
Interestingly, the meager market for smaller units comprises end users who want to move in and not investors, according to the survey.
“Customers are preferably looking for ready to move in property rather than going for under construction property. But not many properties fall in this category”, says D.S. Rawat, the Assocham secretary general.
With supply in excess with private small time builders in the unorganised sector flooding the market, the resale or secondary market is also dull this festival season. The unsold inventory estimated at 1,70,000 units in NCR region is the highest among all other cities. As per the survey, there are nearly 8-10 million workers engaged in building and other construction activities who face uncertain future if the sector does not revive. Property analysts predict a drop of about 15 to 20 per cent till March.