It will take at least two years to get back buyers’ confidence in the residential sector, though, the commercial sector is in a healthy state as far as demand and leasing are concerned. As per a recent report, while the residential real estate is still struggling after years of sluggish trend, the commercial real estate is witnessing a robust streak, buoyed by strengthening business confidence, and optimistic prospects in the fastest-growing economy in the world.
According to a recent report by Cushman & Wakefield India, office leasing registered strong gains of 15% at 33 million sq. ft across the top 8 cities of India during January-September as compared to the corresponding period last year. Also, due to an adequate supply in the office segment, rentals are in control.
In fact, NCR region, comprising Gurugram and Noida, currently has the highest vacancy at about 29 million sq. ft, which is likely to keep rentals in check, as future supply is expected to keep pace with incremental demand.
On the other hand, average prices in residential real estate saw only a slight increase in July 2018 averaging around Rs. 6,100 per sq. ft. On a monthly basis, prices remained largely flat in NCR in July 2018 at Rs. 4,521 per sq. ft (up only 1.4% year-on-year).
Various real estate experts reportedly feel that residential real estate will still take time to recover from the slump and pick up the pace once again. Also, prices in the residential real estate market are not expected to increase in the near future. Therefore, buyers have ample time to do the due diligence and choose a suitable property.
“Since 2013-14, it was a free fall in the residential segment, but things have started settling down since the beginning of 2018,” Live Mint quoted Samantak Das, chief economist and head of research, JLL India, as saying. “Because of various issues, buyers’ confidence is still very low in the residential segment and it will take at least two years to get back that confidence, before we can expect any substantial demand.”