Real Estate Slump Is Still A Very Real Problem
The long-awaited recovery of the real estate sector in India-and the region it belonged to-may have to wait a little longer as a slowdown persists and there are no signs of any price corrections. Live Mint reported that "project stalling rates" have slowed down, on top of a crisis that appears to be persisting and shows no signs of being over just yet.
The situation has been one of the unfortunate by-products of real estate nationalization, thanks to a ruling of the Supreme Court.
The state-owned National Building Construction Corp. Ltd (NBCC) has been requested by the prime court of the land to help with housing projects being built in the nation. The company has been approved to take over the projects of real estate giants Amrapali and Unitech.
These two groups' licenses had been revoked with the court holding them responsible for fund diversions as well as delaying projects. They were also charged as guilty of not delivering projects as agreed upon when homebuyers have already paid some money.
The court orders could be justice served for the people who feel wronged by the developers, but they could not celebrate just yet; NBCC's delivery time on these projects have also been untested.
India has a lot of reasons to celebrate, and that is because they also have been recognized for the "ease of doing business" in the country. However, with that also came trouble. Quartz India reported that the country has experienced an economic growth that remained shallow.
The growth of the economy can be good for a lot of things, including spurring further developments in real estate.
However, progress has been stunted so far, and the government is in denial, saying that the current slowdown the country is experiencing is due to a "correction" of the economy. Everything will be better soon, the authorities have said.
Everything is in stark contrast to what has been said, however. Economic data revealed negative growth in the sectors of a passenger vehicle, tractor, and two-wheeler sales.
Domestic air traffic has also been in stagnation for a long time. Other consumer goods such as white durables have also been taking a hit in terms of sales.
Real estate is a lone bright point in the country, but even then, it could take a hit as well. With the global economic slowdown yet to show signs of improving, this may have to be tolerated for a bit of time.