Realty firms heading for a fall: Sales drop by 70%

Riding on the back of a sluggish economy, the real estate sector of the country has been sinking at a consistent pace. Matters turned much worse with the significant drop in sales volume in the third quarter (July to September) as prices remained high and persistent economic uncertainty kept the investors and buyers at bay.

For major construction companies such as Oberoi Realty, Godrej Properties, DLF and Orbit Corp, the present fiscal year has been on the skids, since, sales dropped by 40-70%. Huge discounts offered to clients by the developers during the festive season that started from October, did little to push the sales and reach its glory.

Sales on the rocks

Real estate companies of the nation have witnessing an acute pain and a huge setback, with the dropping of sales to nearly 40-50% every year. According to market reports, some of the prime realty developers of the nation (such as Oberoi Realty and Godrej Properties) have hit the skids with a drop in sales by 69%. This corroborates the fact the present market condition is weak that is resulting in a drop in new launches.
Major real estate players such as DLF and Orbit could sell mere 20000 square feet of space on an average, during the quarter. Due to the weak operational performance, the financials of such realty firms has been at a toss significantly.

Festive season to trigger change

With the commencement of the festive season, market demand gradually improved, giving the developers the sign for future improvement. However, brokers were not optimistic with it. In comparison to the previous quarter, October witnessed little improvement in sales.

According to broking firms, half of home sales in India take place during the festive season for three months.However, experts suggest the present year will fall short of the target. The reason behind end-user are making property transactions is that developers are offering discounts upto 12%.