Home prices to go up or down? It’s anybody’s guess now!

For the real estate developers, deteriorating credit supply has stirred the stagnancy that ensued and continued since demonetization. The double blow of RERA and GST did affect the industry even to another great extent. The buyers weren’t buying and so the developers were also holding on to the inventories but things suddenly started taking another turn when the industry started struggling with a liquidity crunch after the leading lending firms of the country suddenly started turning their backs to the developers.

With the piling up unsold inventories and rising debt, real estate developers are short of options other than selling properties left, right at center. It indeed is a difficult time for the industry as a whole; however, the fittest of the developers would still sell as the buyers who kept postponing their buying decisions would now show some actions because of the further price corrections and the renewed willingness of the developers to sell.  

The liquidity crunch is not going to ease in recent future; hence this peculiar trend is likely to continue for a while which sees the developers are becoming even more active and on-the-go to sell despite the fact that their cash crunch is severe than ever before.

In spite of the sorry state of the industry, housing prices rose at an average annual rate of 8.5 percent last year, according to a calculation done by Reuters, but the predicted growth in price for the next year is one of the lowest in last decade. This makes it a lucrative scenario for the buyers and who knows if the buying gets the boost that may change the roadblock the developers are facing for last two years.

[The author of this article is a senior Real Estate strategist and runs a Digital agency specialized in Real Estate Marketing. One may contact him at [email protected] for any query or discussion]