Priyanka
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Is the boom in the real estate sector finally over? Home sales have been declining quarter after quarter, leaving many to wonder if the market is sliding into a recession. Recent reports indicate that home sales in nine major cities of India are expected to fall by 23% in the first quarter (January-March) of the current calendar year.
According to real estate data company PropEquity, sales are projected to drop to 1.06 lakh units, down from 1.36 lakh units during the same period last year. This represents a significant downturn in home purchases.
Why Are People Not Buying Homes?
Several factors are contributing to this decline in sales. PropEquity Founder and CEO Sameer Jasuja points to rising home prices, ongoing geopolitical concerns, and a slight weakening of the Indian economy. These factors have led investors and buyers to become more cautious, thereby reducing the overall demand for residential properties.
Sales are expected to see major declines in cities like Hyderabad, Kolkata, Mumbai, Navi Mumbai, Pune, and Thane. Specifically:
- Hyderabad: Sales may fall by 47%, from 20,835 units to 11,114 units.
- Kolkata: A drop of 28%, from 5,882 units to 4,219 units.
- Mumbai: A 36% decline, from 16,204 units to 10,432 units.
- Navi Mumbai: A decrease of 7%, from 9,218 units to 8,551 units.
- Pune: Expected to fall by 33%, from 26,364 units to 17,634 units.
- Thane: A 27% drop, from 26,234 units to 19,254 units.
Cities Expecting Growth Amid the Slowdown
Not all cities are seeing a decline in home sales. According to PropEquity’s data, Bengaluru and Delhi-NCR are expected to experience growth during this quarter. Sales in Bengaluru are predicted to increase by 10%, from 16,768 units to 18,508 units. Similarly, Delhi-NCR is set to see a 10% rise, from 10,235 units to 11,221 units.
The Impact of Market Correction and New Supply
After three years of record demand, PropEquity suggests that the real estate market is now going through a “correction phase,” which is causing the current slowdown in sales. This correction could be attributed to market saturation, higher home prices, and economic uncertainty.
In addition to falling sales, new residential property supply is also expected to drop by 34%. New property launches in the current quarter are estimated at 80,774 units, a significant decline from 1,22,365 units in the same period last year.
Looking Ahead: What Does the Future Hold for Real Estate?
While the real estate market is facing challenges, it’s not necessarily headed for a crash. As certain cities like Bengaluru and Delhi-NCR continue to see growth, the overall outlook will depend on how quickly the economy stabilizes and whether demand can catch up with prices.
