Realty firms hope poll outcome to bring turnaround in market

DELHI/NCR, India - April 22, 2014 - PRLog -- NEW DELHI: Makeshift tents erected by real-estate brokers were a common sight across Noida until a year ago; so were home shoppers hopping between new apartments.

Those tents that once bustled with activity are gone now, and the odd broker in sight is not interested, as home sales have come to a standstill in the middle of an election season with buyers waiting for the poll outcome.

"There are zero sales happening right now," says Noida-based developer Shakti Nath, managing director of the LogixBSE 1.86 % group. "Buyers are in no mood."

The mood of home buyers has gone sour over the past few quarters because of the messy situation that the economy is in. High property prices, rising cost of loans, sticky inflation and the fear of job loss in a slowing economy have been keeping buyers away. Many are waiting for the outcome of the parliamentary elections, hoping that it will help end political uncertainty and bring in a stable policy regime.

"The only way sales will come back is if people start to feel confident about their long-term future. Only then will they take on a long-term liability like a home mortgage," says S Sriniwasan, chief executive of Kotak Realty Fund, a real-estate private-equity fund. "At the moment they don't have that confidence."

While home sales have been slow across the country for the past 12 to 18 months, the last few months have been particularly bad. According to data from property research firm Liases Foras, unsold inventory levels have risen from 650,000 apartments in the quarter through December to 700,000 at the end of March. http://www.sarvodya.com/hot_property.htm

In the past three months, the nation's top eight cities have seen close to 700 new project launches - Mumbai topped the list with 200 projects, followed by Pune with 140 launches. But brokers say sales are happening only in the pre-launch period of a project. http://www.sarvodya.com/hot_property.htm

"Developers are launching with the hope that sales will happen, but only pre-launch inventory is moving because it is at a considerable discount to market rates," says Feroze Abdulla, managing director of Feroze Estates, a Bangalore-based brokerage firm. "It's a stalemate otherwise."