Real estate developers continue to restrict the launch of latest residential project.

Real estate developers in all over the country including top six cities such as; Chennai, Hyderabad, Mumbai, NCR,, Pune and Bengaluru are continue to restrict the launch of latest residential project because of oversupply and much more inventory from last 8 quarters, as per the statement of Samantak Das, who is the Chief Economist as well as Director research of Knight Frank India, which is property advisory firm. Most of the launches are from the January to March 2015 quarter however; in the same period last year the sales volume was remain same. According to the Index of Real Estate Sentiment for the duration of January to March in 2015, the new launches record the marginal improves in last six months.

The same report suggested that the majority of the real estate developers and financial institutions foresee the prices remain in the coming six months. Real estate stakeholders were bullish for the residential sales before the general election in the year 2014. The real estate sentiments have dropped in last one year and so the sales volume as well. Only about 15 per cent of the respondents are expecting the residential sales will get the better move in upcoming months. It is expected that the increase in prices will reduced to less than half in the third quarter of 214.  In present only 33 per cent respondents believe that the property prices will increase the coming months.

It is expected that soon real estate market will witness the fresh supply as we have seen in 2014 and the same trend will continue in 2015.Whereas; there will be drop in the transaction volumes in the first quarter of 2105 and it was approx. 15 per cent drop in the absorption of office and commercial spaces, in short we can say that it was due to the lack of quality supply of office space supply however; some big ticket transactions are still pending. With the reports its clear that real estate market will see the fresh supply in coming years and the majority of the supply will be by stakeholders who had inventories. They have also expressed their positive look towards the rental appreciation for the duration of next six months.

The real fact is that its looks like that economy is revving up with REITs as it has led 68 per cent of the respondents to believe that the latest supply in the office and commercial supply will witness the uptake in the upcoming months. The real estate sentiments in reference to the office space and rental appreciation are the highest price from last six quarters. With significant it’s clear that 85 per cent of the respondents want the rentals to see them as increase going forward.

The stakeholders from all over the country are continue to be optimistic about the future of real estate market in the country as west and north zones are experiencing the dip in the real estate sentiment levels during the first quarter of 2015 compared to the last quarter, whereas; the east and south zones are expecting the revival in real estate sentiment.

few takers are available for new homes in Mumbai and Delhi

In Mumbai and Delhi, real estate developers are finding it difficult to get the buyers and they are facing worse condition because due to unaffordable prices are leaving only non takers for new projects. As per the statement of Anuj Puri who is Chairman and Country Head at JLL India, currently the real estate market is so sluggish and due to that inventory is increasing day by day.

While facing these situation most of the developers are trying to enhance their price for new projects. Samantak Das, Chief Economist and Director Research at Knight Frank India, stated that with the absorption of current rates new builders are trying to get their numbers back. However; price reflection is first sign fo to 20 per cent, stated by Anil Kothuri who is Presidentr bear market in real state sector, whereas; the price is remaining flat for the projects which are in existence from past two years. Some experts are saying that investment in other domains can provide good returns.

Why only few takers are available for new projects?

`Howevver the picture of real estate market is not so much different from Mumbai city as the current supply is higher than current demand. Mumbai is the only place where people can still find the pre-leased commercial properties. Buyers are still waiting for low interest rate however due to correction of price in real estate market they could have to wait for some more time, but after holding the property for one to two more years now investors and builder both are losing hope as well as patience and because of that now they are ready to offer small offers and discounts in the form of different things such as; freebies in flash sales, free parking, low interest of loan, attractive payment plans, free stamp duty and registration and more.

Whereas; with better research you can also find the few builders who are offering big price discounts for those who are buying in bulk because discount largely depends on kind of area, location and property. In big deals, because of economies of scale, builders are ready to provide 15 to 20 per cent discount for those properties which are under construction. But discount is still small that is 5 to 10 per cent for those properties which are ready for possession and available in secondary market. All the differences in price and property trend is differ as per area too. In the absence of large supply there are less price pressure in the western suburbs, but for central Mumbai areas such as; Parel and Worli the price pressure is more.

How long the latest trend will continue?

Another most important question is that till what time the recent property trend will continue? Changes in policy by the Maharashtra government can add a lot of supply in current market and then there will be possibility that real estate prices will become more affordable, but it will take some more time. Real estate market in Mumbai had seen very much price correction in between the year 1995 to 2001; however the prices are crashed by half in many pockets.

What end users and sellers can do?

While analyzing the recent property trend you can classify the real estate sector into two categories; end uses and investors. The correction has just started because there are no room for panic selling in real estate market, so buyers who are waiting for right movement to buy property should wait for 1 to 2 years, but still end users are restricted by many other factors such as; birth of kids, financial capability, marriage, getting a better job, and more.