Requirement for houses decreased in third quarter
A report by Knight Frank says that due to the economic slowdown, the interest rates are increased, because of which the demand of residential property decreased. In the 3rd quarter of 2013-14 the sales of residential property decreased by 43 per cent to 11.8 million sq ft from 21.9 million sq. ft. The annual increase of prices of residential units in the last eight quarters is nearly 10 percent.
The preparations of general elections have also affected the liquidity in the system. A famous builder says that large amount of black money of many political parties is invested in the real estate market which they take out during the time of elections to fund campaigns.
As per the report by Knight Frank, the decrease in the sales is highest in North Indian market followed by Western India while the Southern Indian market witnessed increase in the sales due to which the shares of South India based companies has gained the maximum profit during the past eight quarters.
The vast debt burden because of decrease in sales of north India based real estate companies, forced them to modify their plans. They were reducing the new launches and focused more on completing the ongoing projects and selling them to reduce their debt.
As per the report, the sales in 3rd quarter of 2013-14 decreased by 57 percent to only 5.98 sq ft as against 14 million sq ft.
However the sales remain constant in southern market. As per the report, the sales increased by 4 percent to 3.9 million sq ft in October-December quarter of 2013 as against 3.8 million sq ft in the same period last year because they are offering affordable residential property.
Source: The Economic Times
black money, Campaigns, Debt, general elections, Knight Frank, North India, North Indian market, preparations of general elections, Real Estate Companies, Realty News, Residential property, Southern market, Western India
