Slow economic growth adversely affects housing demands
According to CBRE’s bi-annual India Residential Market View report for H2 2013, a slow economic growth, coupled with high property prices and steep interest rates, resulted in feeble demand for housing during the second half of 2013
Mumbai’s housing market remained largely stable, with a slight positive reception in selected premium micro-markets. In comparison to the first half of 2013, the exception was Central Mumbai, where values declined by 4-5%, owing to sluggish demand
It is supposed that rising construction costs and high vacancy levels had led to slow down in construction activity, resulting in a decline in new launches, and more delay in project completion timelines.
The report, released on Wednesday mentioned “Liquidity issues and an increasing inventory caused developers to shift their focus from new launches to the completion of existing projects—although delays in project execution continued to remain an over-riding concern in most emerging housing markets.”
The prices have been reduced in selected projects by the developers, and they have also offered discounts or marketing promotions to draw buyers in micro-markets with high inventory levels.
End-user demand in the high-end and mid-end segments remained low, whereas the premium housing segment saw a steady interest from high net worth individuals (HNIs) and non-resident Indians (NRIs).
During 2013, the depreciating rupee which tumbled to a series of low records resulted in an increase in NRI enquiries for property in India.
Source: The Times of India
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