2019 starts with a slippery sales in housing sector, surge after Election!
New Delhi (PTI): Showing signs of recovery, the real estate sector saw almost 50% surge in housing sales in 2018. It is because of a demand for affordable flats on stable rates across major cities. But, year-end liquidity crisis dashed hopes of a strong growth while home buyers remained a worried lot over delayed delivery.
Sales surge after election
Still, the revival has been significant, coming after triple shocks of demonetization, tighter regulations and the GST roll out. Property developers and consultants expect housing sales to remain subdued in the first half of 2019. It is due to the continuing NBFC liquidity crisis and upcoming general elections.
However, sales may surge in the second half if a proposal to cut GST rate on under-construction flats from the current 12% gets approved. Moreover, if the liquidity situation improves among NBFCs (non-banking finance companies), which have been funding the real estate sector heavily.
Mantra is ‘Affordable housing’
Affordable housing became the new buzzword, helping residential segment to slightly recover from its lows in 2017. Then it was hit hard by the note ban in November 2016 and two new laws, RERA and the GST, implemented respectively.
Housing sales in 2018 is estimated to have risen 47% in seven cities, although on a lower base. Ready-to-move-in flats were in greater demand due to low risk and no GST (Goods and Services Tax).
The pain of Buyers
The apartment prices were stable and may remain flat next year, even if demand improves, because of over supply.
The pain continued for lakhs of home buyers who bought flats in the projects of defaulting developers such as Amrapali, Jaypee group and Unitech.