Bengaluru: Builders across the country have deferred launch of new housing projects and curbed marketing expenditure as buyers continue to hold off home buying, pursuing the government’s demonetization push.
Real estate sector, which was already going through a big slowdown, has been pushed in to the sleeping mode for few years. Several premium housing projects which were scheduled to launch in 2016 have already been postponed to another quarter or even later on, whilst inexpensive or affordable housing projects are now being launched.
Kolte Patil Developers Ltd has two upcoming housing projects in Bengaluru, which were expected to be released quickly. One of these is for the middle-income group on Hosur Road and other one is labeled as premium project in Koramangala area. The developer plans to launch the housing project for middle class quickly however the second option for rich buyers will be launched only within the first quarter of 2017.
Customers are deferring their house-buying choices which will have some impact on product sales for a while. However, we are getting enquiries and walk-ins for our mid-segment projects, which is why we will launch the project,” said Gopal Sarda, group president and chief executive-Mumbai, Kolte Patil. Gurgaon-dependent Alpha Corp. Development Pvt. Ltd, which has projects across North India, has deferred the release of a housing project in Gurgaon’s Sector-15 in next six months. The group intends to sell the houses in this project for Rs 1.5-2 crore .
“Though we feel demonetisation has mostly not impacted main product sales, (center-class) buyers’ sentiment continues to be influenced. We were previously intending to launch the task in Jan,” stated Ashish Sarin, director and chief professional, Alpha Corp. stated.
Project releases have already been sluggish over the past year, as most of the developers are focused on completion and delivery of ongoing projects at the earliest. And developers were selectively looking to launch new projects ahead of the festive season, though sentiment changed over the past few months. The demonetisation push seems to have brought change in those plans.
“Everyone is postponing launches with a quarter or two. The actual impact of demonetisation will be understood by January end, but we are expecting interest rates to come down by 100 basis points,”
Home buyers are also expecting the possible price correction and deferred their plans to buy homes now. Most of the customers who were about buy their dream homes in just concluded festive season are now holding back, in anticipation of a possible drop in costs.
Enquiries are there, though “The impact in the last three weeks has been evident in transactions not happening. Things should be back to normal by March, because beyond a time limit, people will eventually make their decisions.Renowned developer of housing projects in Mumbai, Mr. Hiranandani said developers could go easy on marketing and advertising considering poor need.Even if it chooses to do so, it will go in for a “soft launch”, Hiranandani added, though his company has yet to take a decision on going ahead with the launch of seven new towers across several project.