SALES ON THE RISE, SAY REALTORS

SALES ON THE RISE, SAY REALTORS
The Times of India (Bangalore edition)

In a recent pan India property brokers' poll, Edelweiss Securities Ltd, a financial services major, confirms that the volumes and transactions in the residential property market have shown strong signs of going upwards, after elections. The poll survey, compiled by Aashiesh Agarwaal, CFA, and Akshit Shah, says that a favourable electoral outcome has triggered a reversal in consumer sentiments.

"In our opinion, buyers were sitting on the fence anticipating a further price fall. However, a significant change in sentiment after elections, preceded by stimulus measures, has contributed to a strong recovery in volumes and prices. We believe prices have increased in the past 1-2 months", they say.

Nearly 87 percent of brokers witnessed an increase in transactions in the past one-month against no sales earlier, while 76 percent of the total respondents are still expecting prices to stabilise over the next three months. The brokers' outlook over the next 12 months has changed significantly since the last poll - 53 percent of respondents now expect prices to increase against 53 percent that expected a decline in prices earlier.

In the overall observations, 96 percent of brokers believe prices have fallen over the past year while 67 percent believe prices have stabilised over the past three months. Nearly 84 percent have seen an increase in transactions over the past one-month while 72 percent have witnessed an increase in enquiries over the past month.

Regarding price stability, according to the poll, 72 percent of the brokers polled expect prices to stabilise over the next three months while 53 percent expect price trends to be positive over the next one year. On what has changed significantly in the residential sector since the last poll, Aggarwal and Shah observed that the developers have either raised or are planning to raise funds via stake sale. At the same time, new launches at reduced prices showed high absorption rate for these projects. Above all, the positive outcome of the elections catalysed the demand.

In the first week of April, the company had conducted a poll of 100 potential buyers at a property exhibition. One of the key findings was that 52 percent of potential buyers thought prices were attractive, although many were still in the mood to wait for a further price correction. However, a strong election outcome has led to these buyers jumping back into the fray.

Lowering of interest rate too has played a positive role. The repo rate was cut from five percent in March 2009 to 4.75 percent in April 2009. The reverse repo rate was cut from 3.5 percent in March 2009 to 3.25 percent in April 2009.

Besides these factors, according to the report, throughout India, brokers have turned positive since the previous poll and the percentage of brokers with a negative outlook for the next three months has decreased to 13 percent from 76 percent earlier. Overall, for the next three months, brokers have turned their outlook to steady.