Residential Growth Sustains Prices, but Outlook’s Changed

The real estate market has witnessed more or less a stable pricing scenario in the last 03 quarters after seing a sharp increase in the 02 years that followed the subprime crisis of 2008.

A Delhi based research result for real estate, the volume growth in the residential segment has improved inspite the increase in the interest rates. This keeps the property prices at higher levels. The Chennai real estate market tops the chart with increase in demand from both commercial and residential segments.

However, the Mumbai market has witnessed a correction in the last 03 quarters due to a delay in project approvals. The outlook on future price trends is mixed. Also, a drop in property prices looks distant in cities with lower inventory. On the financial front, most real estate players have reported better results on the back of higher sales volume.

Real estaters normally have execution issues which impact their debt repayment schedules. To tackle such issues and achieve greater transparency, companies are focusing more on product positioning and improving project execution certainty. On the other hand, qualitative factors such as hassle-free land bank and developer’s goodwill in getting land approval will improve company positioning with customers.

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