Moody's stamps surge in realty sales

In stark contrast to the sharp fall in the sales post demonetization, sales momentum in the country's real estate sector is recovering at a rapid pace, said ratings agency Moody's in its recent report. The sales volumes are expected to gradually accelerate in the affordable housing sector as liquidity returns post demonetization move. It further elaborated that sales volume in real estate sector decreased by around 40% year-on-year in the fourth quarter of 2016, while launches dropped by around 60% during the same period. There were signs of extreme caution by buyers, and real estate developers refrained from announcing any new project during this period, the ratings agency added. Sentiment in the sector has improved since then. Measures in the 2017 budget will support the affordable housing segment, while reductions in home loan rates since November 2016 will improve demand. One measure introduced in the budget was the granting of infrastructure status to affordable housing, which will allow developers to borrow at lower interest rates. At the same time, the government introduced measures to prop up the secondary market. A more liquid secondary market will in turn benefit the primary market. At the same time it also cautioned that the sales for the luxury and mid-market segments likely to remain weak for another 12 to 18 months.