Real estate sites in India have had a tough few months since November of last year. Needless to say these difficult times for property sites are the result of the demonetization scheme of the government. Demonetization has been the biggest domestic news story of the past three months and the real estate sector in India has felt the impact of the note ban more acutely than has any other sector.
Falling Consumer Sentiment
According to credible sources, developers and financial institutions both have been severely impacted by the decision of the government to change the status of high denomination notes to nothing more than mere paper. Consequently real estate sites in India have witnesses a precipitous drop in the number of visitors to their site.
Sentiment Down, But Not For Long
As per analysts who monitor industry sentiment, the real estate industry’s sentiment is at a 3 year low. Yet this is not the full story, even as many developers and financial institutions are largely pessimistic concerning Indian realty today, they expect that the future of real estate will be bright. Real estate websites may have reason to cheer within a few short months as visitors once again gain the confidence to visit portals to trade real estate.
Who Says Things Will Be Fine?
According to reports by reputable real estate consultants, within six months, the sentiment of the real estate industry will change to a more positive note. As per a report from consultants and an industry body, most developers, banks, and financial equity investors are inclined to believe that an improvement in market sentiment will emerge within six months. If, within six short months, there will be reason to be ebullient regarding Indian realty, property sites in India that can weather the current storm may reap lucrative rewards in less than a year.
Quantifying Market Sentiment
The sentiments of stakeholders of the real estate industry in India are largely negative as can be gauged by a drop in the sentiment score to below the threshold level of 50. This score of market sentiment is the worst since early 2014.
To gain a clearer understanding of the relevance of a drop in this score it should be noted that pre demonetization it had stood at 58 but today stands at 41. This real estate sentiment index is derived from quarterly surveys of key supply side stakeholders including developers, private equity funds, banks, and non-banking finance corporations. According to these very stakeholders, this score, which reflects market sentiment, will rise to 61 by the second half of this calendar year. Once market sentiment rises above 58, which is higher than where it had been before demonetization, real estate site in India would once again begin to conduct brisk business.