Ind-Ra famous that affordability had been a first-rate driver for housing gross sales in FY22. (Representative picture)
Overall, Ind-Ra anticipated the gross sales momentum to proceed and housing gross sales to extend by 9 per cent year-on-year, supported by a gentle, wholesome demand.
Housing costs rose 8-10 per cent on this fiscal yr and should additional improve by 5 per cent in 2023-24, India Ratings and Research (Ind-Ra) mentioned on Tuesday.
The ranking company has revised the outlook on the residential actual property sector to impartial from enhancing for FY24.
“The residential actual property market continued its upward trajectory in FY23 (gross sales development of 15 per cent year-on-year for high eight real-estate clusters) regardless of strain from larger enter prices, growing mortgage charges, and home and world recession,” Ind-Ra said in a statement.
Recessionary and inflationary pressures could impact near-term demand slightly, it said, but expected the market to absorb the pressure.
The agency believed demand would pick up eventually.
Overall, Ind-Ra expected the sales momentum to continue and housing sales to increase by 9 per cent year-on-year, supported by a steady, healthy demand.
“Property prices have risen by 8-10 per cent year-on-year in FY’23, and might increase further by 5 per cent year-on-year in FY24,” Ind-Ra mentioned.
It identified that building prices have risen 8-10 per cent year-on-year in FY23, with elevated enter prices inflicting the blended prices of builders to go up by 5-6 per cent year-on-year.
“However, builders won’t hike costs over the following six-to-seven months in order to deal with any macroeconomic considerations and may await the demand dynamics to play out,” the agency said.
Ind-Ra noted that affordability had been a prime driver for housing sales in FY22.
“However, inflation compelled increase in selling prices by developers, and a series of repo rate hikes of 250 basis points since May 2022 have challenged demand dynamics in the affordable segment in FY23, while also causing mid and premium segment buyers to defer their purchases,” the assertion mentioned.
Ind-Ra expects tier 1 gamers — these having constructive model fairness, a big scale of operations, excessive execution capabilities, sturdy refinancing skills and wholesome stability sheets — to file a powerful working efficiency in FY24, given their growing market share.
Some tier 2 and marginal gamers would proceed to battle with poor gross sales, collections and liquidity, it added.
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