Mumbai: Sentiment remains muted for the residential realty market, leading to a continuous fall in new launches across major markets, as the election euphoria seems to have started ebbing, according to a recent survey.
According to a report by FICCI-Knight Frank, stakeholders were bullish about residential sales, post the general election in April-June of 2014, but the increased sales did not materialise over a period of time and affected the sentiment.
"The ongoing lull in the residential market reflected in the lacklustre sentiment levels and the continuous fall in launches and absorption across markets. Developers have continued to restrict new residential launches owing to the oversupply scenario prevailing over the last eight quarters," Knight Frank India Chief Economist and Director - Research Samantak Das said.
He observed that the overall sentiment is continuing to rationalise, post the 2014 election results.
According to the report, merely 15 percent of the respondents, which included developers, private equity funds, banks and non-banking finance companies (NBFCs), expect the residential sales to be better in coming six months.
"While launches have nearly halved during the quarter ended March 2015 compared with the same period in 2014, sales volumes have managed to hold steady. However, new launches are likely to see a marginal improvement over the next six months," he said.
The proportion of respondents expecting an increase in prices has come down to less than half since Q3 of 2014 -- just 33 percent believe that prices will go up in the following six months.
"On the pricing front, the report suggests that a majority of developers and financial institutions foresee prices to remain stagnant in coming six months on the back of subdued demand," Das observed.
"While the current sentiment score at 51 is barely positive, the future sentiment score still stands at a healthy 64, indicating a strong positive undercurrent."
