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Real Estate Market of Lucknow sees 50% decline

09.23.2013 · Posted in Property, Real estate

LUCKNOW: City’s Real Estate market has started assuming signs of panic with returns on properties disapprove to less than 20 percent in 2012 and the trend continuing in 2013. Almost all bigger and renowned real estate companies in Lucknow which had invested in the city have accomplished more than 50 percent decline in sales last year and the bearings has alone worsened this year. As professional demand that while there is an overflow of projects in the city, there are not abundant takers for these and the market has initiated showing signs of saturation. Earlier, before the slowdown, if the realty sector was increasing, returns were up to 40 to 50 percent but that breakthrough has shrunk to just about 20 percent. This is in sharp adverse to projects in metros like Mumbai, Delhi and even NCR where price of the property escalate up to 80 percent within a year.

As companies suggest, there has been a breakdown in number of real estate deals in the primary pre-launch stage. The bigger reason for this slump is attributed to the significant cost increase of plots and properties in the previous few years. The growing costs of the property have made it unreasonable for several lower and middle and asl well middle class individuals/ families living in the city to invest. Besides, there are added reasons like impending land clearances, delays in government approvals, protests from farmers, weakening clients sentiment because of poor economic growth, affluence of inventories compared to investors and sluggish pace of architecture which have accumulated to reduce investments in the sector.

Professionals believe that Tier-II and III towns are a majorly investor-driven market. Humans actually favor investing in a property of a An executive working with one of the top realty companies in the country stated that the idea of pre-launch, in which companies take help of brokers to allure investors to fund the project even before it take off, has established to an investor driven market here. About 70 to 80 percent units are being bought for investment purpose in the city. Only ready to move in units are being favored by end users at the moment.

Another acumen is too abounding inventories that have cropped up in previous few years arch to assimilation in the market. Added than 10 big top builders in Lucknow have entered previous year eying the arising market but unluckily the purchasers have not developed in proportion to the number of projects here, mainly because of the cogent rise in the price of real estate. When the project is introduced officially, the costs of the properties shoot up decidedly compared to the ‘soft-launch’ stage. As an instant, new consumers become afraid to purchase these properties at higher price. They favor instead to purchase them from the original consumers (investors) who sell properties at a lesser amount than that quoted by the company. Experts think that the sector still holds an excellent potential and would offer about 5000 to 7000 added units in 2013 pinning hopes on investors from a part of the public.